Paris – The final votes have yet to be tallied in the United States but European exporters are already excited about the prospect that Joe Biden may put an end to a trade war and lift US tariffs on their products.
While a presidency under Biden, who was called as the winner of the US election on Saturday, will certainly differ in style from Donald Trump, experts warn that European manufacturers shouldn’t get too ahead of themselves.
The Democrat will also be tough on the issue of defending US trade interests, they say.
“We hope that the United States changes direction on trade… by renouncing… the autarchist policy of the Trump presidency,” said Nicola Bertinelli, head of the consortium of parmesan producers which send more than 10 tonnes of the hard Italian cheese to the US every year.
Italy’s main farmers union, Coldiretti, called for the lifting of the 500 million euros in trade sanctions imposed by the Trump administration on products such as salami, mortadella, Gorgonzola cheese, fruits and vegetables.
Over in France, Jerome Despey, head of the FNSEA farmers’ union, said he hoped “that one of the first topics (of discussion between the new US administration and Europe) will be on dropping” the 25 percent tariffs on French wine.
And Dcoop, one of the main cooperatives of Spanish olive farmers, also said it hoped the Biden administration would abandon the 25 percent tariff on their products.
– EU slaps tariffs on US goods –
Despite rising calls to reduce tensions, the EU went forward Monday with plans to impose billions in punitive sanctions on US goods.
The move is the latest step in an arduous 16-year conflict at the World Trade Organization that pits Airbus against Boeing over government support for the aircraft makers.
But the timing of the announcement was surprising as the EU welcomed Biden’s victory as the end of an era of protectionist trade rhetoric and tit-for-tat tariffs.
The EU had even said it would like to see a negotiated end to the dispute.
But Europeans are not united, with Germany inclined towards reconciliation with Washington while France wants to stick to a harder line.
“We shouldn’t be under any illusion. The United States has not been a friendly partner of European states for many years,” said French Finance Minister Bruno Le Maire days before the election.
European goods covered by $7.5 bn in tariffs announced by the US in 2019
– No quick return –
“There has always been protectionism in the US: steel, for example, has always been a tense topic with Europe, as has wood with Canada,” said Ruben Nizard, North American economist with Coface, a company which insures trade finance.
“Certainly, Donald Trump with his tariffs on Chinese, Canadian, Mexican and European goods had a very aggressive policy, but the idea of protecting American companies is also present in Biden’s programme,” he added.
The decline in manufacturing jobs, a major US concern, was the reason Trump cited in hiking tariffs on goods entering the United States to stand at more than 20 percent on average today.
“We’re not returning in the next two years to the level we had at the beginning of 2018,” which was between 7 and 8 percent, said Nizard.
– ‘America first’ –
“Joe Biden will pursue the ‘America first’ policy of Donald Trump but in a more skillful and less radical manner,” said Marcel Fratzscher, head of the DIW Berlin economic research institute.
He “is not a fan of free trade” but he is “convinced of the necessity of working together in international institutions. That is an important difference,” added Gabriel Felbermayr, president of the Kiel Institute for the World Economy.
For ING economist Carsten Brzeski, Donald Trump’s threat to tax European — in particular German — car imports should disappear.
“However, at the same time, it is hard to see President-elect Joe Biden suddenly cheering the large German trade surplus with the US,” he said.
Comparison of annual orders from Airbus, Boeing since 2007 and monthly orders for 2019-2020