David Vance SubstackRead More
So the European Parliament is threatening to suspend approval of the US tariffs deal negotiated last July, sources close to its international trade committee claim. This announcement, planned for Strasbourg today, represents a really petulant escalation from the Europeans and it is as self-defeating as it is stupid!
The Turnberry agreement is still pending European Parliament ratification. Europe had paused its threatened €93bn retaliation package against Trump until February 6, but French President Macron is now pushing a so-called “trade bazooka” His relationship with Trump has turned toxic and here’s an example of that from the other day!
Meanwhile US Treasury Secretary Scott Bessent has urged the Europeans to “sit back, take a deep breath, do not retaliate,” noting President Trump would deliver the message directly. Commerce Secretary Howard Lutnick warned that US patience has limits: countries ignoring advice face consequences, ensuring America won’t tolerate bad-faith retaliation against its fair trade measures.
If they ignore this advice, I think they will live to regret it. The US economy has been surging in terms of GDP growth whilst the EU is pretty stagnant at just over 1%. Suspending the Trade Deal with the US is likely to invoke Trump’s further wrath and the EU economy is just not strong enough to withstand any sudden trade war. France, in particular, has a sclerotic economy, and for all Macron’s bluster, it would likely collapse into recession.
But France and the EU may be looking East, not West, Listen to Macron begging China to invest in his country. It’s blatant.
I think this is all part of the massive ongoing re-organisation of the economic world order and it looks to me that the EU is moving towards China and away from the USA. This will not end well for the EU.
