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On a Mercedes assembly line at the Daimler AG factory in Rastatt, Germany
On a Mercedes assembly line at the Daimler AG factory in Rastatt, Germany
Dominique Seux

-Analysis-

PARIS — With his new sweeping round of protectionist tariffs on steel and aluminum, it looks like Donald Trump has decided to extend to the economic field the "madman strategy" he had already applied to the Korean Peninsula. That was the take last week from former CIA Director David Petraeus. Developed by the Nixon-Kissinger tandem during the Vietnam War in the early 1970s, this approach consists of leaving opponents in a state of uncertainty and making them believe that anything is possible, and that nothing is forbidden.

Applied to the trade war, this translates into a tweet from the current American president: "... trade wars are good, and easy to win." In other words, "just you watch what I'm capable of." The White House's swaggering tone, the absence of technical details and the strength of a measure that affects the entire world (Europe, Canada, Japan, Korea, China, etc.) without distinction allow such an interpretation.

This decision has a political significance: It's a message sent to American workers and the steel lobby, which is very much represented in the government. But financially, it makes little, if any, sense. Though it's legitimate to punish countries that have applied their own protectionist measures — like China, which subsidizes its steel exports —, penalizing trade with countries that play by the rules is incomprehensible.

Anything is possible, and nothing is forbidden.

Why do so many rich New Yorkers drive a Mercedes-Benz, while so few Germans buy Chevrolets? That's what Donald Trump once asked, convinced that his question and its supposedly plain common sense would strike a chord among everyday Americans. In that case, the rest of the world could retort that Amazon, Google and Coca-Cola are everywhere. Each country scores points based on their comparative advantages and skills. It's equally clear that U.S. consumers will be the victims of higher prices on their cars or beer.

How can Europe react? Standing there with slumped shoulders is not an option. The American measures will have consequences for European exporters (6 billion euros) and the Old Continent cannot be relegated to the role of "global village idiot" once and for all. We should also capture American imaginations, making them fear countermeasures on flagship products without engaging in a game of tit-for-tat — i.e. jeans, Harley Davidsons or whiskey made in the U.S., as European Commission President Jean-Claude Juncker and the EU's Trade Commissioner Cecilia Malmström suggested.

The Old Continent cannot be relegated to the role of "global village idiot".

Beyond that, the most important thing is to close ranks against Donald Trump and his demagoguery. The most worrying is the lever he uses, a 1962 text intended to protect American interests in the middle of the Cold War. At a time when China's leader is giving itself a mandate for life and Vladimir Putin is going in full-scale in Syria, Libya and almost openly influences democratic elections in our countries, dividing the West like Trump does is worse than irresponsible. It's pure blindness.

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