Since Donald Trump’s election in 2016, he has caused many EU businesses quite the set of headaches.
The 45th president has previously hit out at the European Union for treating the US “very badly,” as well as taking issue with Scotch imports, steel tariffs, and airplanes (epitomised by the ongoing Airbus and Boeing dispute) to name just a few.
Most recently, he is suggesting a further trade restructuring on the $1 trillion trade relationship with the European block which, considering the timing, must be seen as a re-election tactic. As such, there remains a huge question for EU companies on what will happen if Donald Trump is re-elected on November 3rd.
The good news for Brussels is that, according to the Financial Times, Biden holds an 8.5% lead over Trump in the national opinion polls. This is echoed by the UK bookies, who are giving Biden the best odds on the US Presidential Elections. Paddy Power are currently giving a Biden win of the popular vote, by 5m votes, odds of 1-4. However, they are also predicting that the Republicans could be the winning party 5-4 versus the Democrats 4-7.
When looking at previous election results, there could also be a clear cause for concern for Europeans hoping for an end to Trump’s tenure. All three of the last US presidents, Clinton, Bush, and Obama respectively, have won the election when seeking their second term. Whilst this is currently looking unlikely for Mr Trump, it is not out of the question. However, the polls in each case were much more greatly in the to-be presidents’ favours. Obama, Clinton, Bush were ahead by 4%, 9% and 2.4% ahead respectively).
If Trump was to be re-elected, there will be understandable concerns for the seemingly tit for tat tariffs being used either side of the Atlantic. However, whilst Biden may be tempted to lower these tariffs and reharmonize the organisations on either side of the Atlantic divide, he might not be the saviour the EU is looking for. In Biden’s imaginatively named manifesto, “The Biden Plan”, the talk is not of unification of Brussels and Washington, but rather more of a return to the US isolationism of goods that was seen in the mid-90s.
The Biden Plan for goods being “Made in All of America” by all of America’s workers does not seem to indicate open-ended trade agreements to anyone outside of the US. The plan goes through the fact that US manufacturing was part of the ‘arsenal of democracy’ in the Second World War and must be an ‘arsenal of American prosperity’ today. This will be of concern for the EU car business, which already has a target on its back from Washington. The return of “Buy American” is not a good sign for the EU motor and manufacturing industry. Another way in which Biden will attack non-US manufacturing industries is through a carbon adjustment fee. This fee will ensure that the US manufacturing industry is not ‘undercut’.
It would seem that no matter which way the presidential election goes, there will be turbulent times ahead between the two blocks on trade. However, until November 3rd, all we can do is speculate.
