Adhering to the terms of international trade deals, or any international deals for that matter, has always been a matter of trust. And trust mattered, for without it, no deal was a deal, and no country could be held to its end of a bargain if it simply chose not to honor its obligations. After all, what can really be done about it? Complain to the United Nations? Take it to the Hague? Go to war?
Since World War II, there has been one alliance where the trust was so deeply grounded that the idea of breaching agreements seemed unthinkable. That was between the United States and Europe, since refined to the European Union. We were allies against Hitler and the Nazis, partners in NATO and the bastion of first world democracy. It was us against the world, the world being the Soviet Union and Communist China, with third world countries being off to the side for occasional plunder or noblesse oblige. Or both.
During his misbegotten tariff frenzy, Trump bragged about the trade deal he made with the European Union at Trump’s Turnberry Golf Course in Scotland, where he agreed to limit tariffs to 15%. This came before the Supreme Court held his capricious tariffs were unconstitutional, after which he imposed 10% tariffs illegally on the world, except the EU.
It was a lousy not a great deal for the EU, as its trading advantage based upon 15% tariffs compared with tariffs over 100% fluctuating with Trump’s digestion was lost when tariffs were limited under the Section 122 tariffs. But rather than go to war with Trump, the EU decided to honor its agreement, as honor was the only real “stock in trade” in international dealings. But there was a catch.
[Bernd Lange, chairman of the European Parliament’s trade committee] said the approval was only possible because of a number of safeguards put in place by the parliament, allowing the EU to react if the Trump administration breached the deal’s terms and terminating the deal at the end of 2029 unless there is new legislation to renew it.
“You can’t have any certainty. That’s the problem,” Lange told a media briefing.
“As long as the U.S. set-up remains as it is… with decisions on important issues only made in the White House and by the president you have to constantly expect that decisions will be made against agreements,” he continued. “We see that and others too, such as Brazil.”
Unsurprisingly, Trump exacerbated the problem by twice threatening the EU with “much higher tariffs” if it didn’t back Trump’s acquisition of Greenland and approve the deal by July 4th. Each time this happened, the parliament paused its consideration of the deal. Eventually, the EU decided to avoid further antagonizing Trump and cut the deal.
But the EU put conditions on its approval, realizing that it would not sacrifice its honor knowing full well that Trump could abrogate the agreement at any moment.
“We can completely forget the special transatlantic relationship in this matter and we have to defend our interests rationally,” he said.
Refusing to honor his agreements was Trump’s longstanding hallmark. As far as the European Union is concerned, it is now America’s official international policy. They can’t trust Trump to keep his word, and so the EU built in an escape clause should Trump wake up one morning with indigestion and demand they give him Greenland or pay the price. There was a time when our allies could trust with certainty that the United States would honor its obligations. That certainty is gone.
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