The walk over burning coals with tariffs rattling has been completed and a soothing coolness has returned. EU Commission President Jean-Claude Juncker came to Washington with a publicly pronounced low level of expectations.
But, as could be expected, when it was all said and (hopefully) done, acerbic argument gave way to collegial progress. The United States will be able to sell more of its products to Europe and, in exchange, the threat of prohibitive tariffs will be eased.
Some observers believe that these developments were unexpected — like manna from heaven. Not so! The Trump administration had undertaken many steps to indicate that trade was a key concern. Unlike the experience with other administrations, President TrumpDonald TrumpUN meeting with US, France canceled over scheduling issue Trump sues NYT, Mary Trump over story on tax history McConnell, Shelby offer government funding bill without debt ceiling MORE persisted in his intent to support American business, domestically and internationally.
The shot across the bow of the ship Europa helped to concentrate the minds of policymakers. Yes, they still have other problems, such as the North Atlantic Treaty Organization (NATO), household deficits, Brexit, migration and more.
However, with the imposition of significant tariffs, Trump made it clear that trade had to move up on the list of important policies for the EU to consider.
After much hesitation, the adjustment steps began to take place. And rightfully so, when one considers that it has been more than 70 years — three generations — since the setting in place of U.S.-sponsored world trade mechanisms such as the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade.
Back then, the principal dimension of these policies was the strengthening of European economies in order to improve local standards of living and to achieve a meaningful defense against the then-Soviet Bloc. In support of these goals, the U.S. willingly accepted its leadership cost to a growing excess.
The world changed, however, as did its opportunities and threats. Yet, the U.S. negotiation approach stayed the same: support others, don’t worry about the drawbacks to privileged U.S. firms. Over time, the U.S. started to fall behind — lots of imports, few exports and still no major support from the federal government.
When Trump took on his presidential campaign, he promised changes in the U.S. trade picture, and he even lived up to that goal after he won the 2016 election. He started to use an anvil-and-hammer approach to break through old-fashioned trade restrictions and chains.
When other nations complained, he warned them of the sparks that could fly during the hammering in a larger forging process. His watchword was “reciprocal” relations.
Now, it has worked out. With reason on both sides, there will be progress and stronger linkages. It is gratifying to see how past barriers can be converted into linkages.
Decades ago, for example, the river Spree in Berlin clearly marked the distance and separation between East and West Germany. Today, the very same river offers easy crossing and pulls the two river banks together. Its flow encourages rather than inhibits linkage.
The willingness to acknowledge shortcomings and to engage in the collaborative implementation of solutions is a new engine for economic growth, on both sides of the Atlantic. President Trump has coached this correctly, and the EU and President Juncker are good co-captains. Let the new game begin!Michael Czinkota teaches international business and trade at Georgetown University and the University of Kent. His book, “In Search for the Soul of International Business,” is due to be published in October.