US President Donald Trump listens that Indian Prime Minister Narendra Modi speaks during a joint press conference in the eastern room in the White House on February 13, 2025 in Washington, DC.
Alex Wong | News about Getty Images | Getty Images
US President Donald Trump’s tariffs could encourage allies to establish closer relations with other countries like China and India, according to former US diplomat Wendy Cutler.
Comes in the middle of the US President’s threat to collect steep tariffs on European alcoholic products, after The European Union said That would impose counter tariffs on € 26 billion ($ 28.33 billion) Valuable US goods from the beginning of April.
Tariff Block 27 Nations measures followed US duties to all imports of steel and aluminum.
Trump trade policies, which seem to be intended to balance the economic order in favor of America, include tariffs against Canada, Mexico and China.
In an interview with CNBC “Squawk Box Asia“On Thursday, Cutler, who had previously been an act of Deputy US trade representative, pointed out that traditional US allies, such as the EU, announced a” very ambitious negotiating strategy. “
Cutler said “EU concluded a big deal with Mercosur countries. The EU and India will restart its negotiations. “
Mercosur is a Spanish abbreviation for the southern common market, a regional trade block made up of Argentina, Bolivia, Brazil, Paraguay and Uruguay.
EU Completed negotiations with Mercosur countries December is a political agreement that Described by the Center for Strategic and International Studies As a “significant job” and the only Mercosur with a large trading block.
CSIS estimated that the agreement eliminates tariffs to over 90% of bilateral trade, sparing European exporters of EUR 4 billion a year, while providing South American products preferential access to European markets. He added that this means that “European products will enter its market in much better conditions than us or Japanese products.”
‘China can help’
Competitive powers, such as China, have also drawn other countries, Cutler said, noting that the second largest economy has upgraded its free trade agreement with the Asean Region.
“It makes an overture in other countries, and if our partners can’t rely on us. Guess what? These other countries, including China, look more attractive.”
Cutler is not the only person who suggests that Europe may be watching the tension between the USA -the region escalation somewhere else.
“The reality is, in the broadest sense of the word, Europe must seek alternative markets to US China,” David Roche, a strategist in quantum strategy, said CNBC earlier this month.
Photographic illustration of euro and US dollar bills in the Netherlands on July 14, 2022. The US dollar went close to the three -day low to the main peers on Thursday, after being convinced by the president of the federal reserves of Jerome Powell that the merchant cares for constant aggressive spinning.
Nicolas Economou | Nurphoto | Getty Images
“One thing I learned at the negotiating table, you have to have respect and trust if you will reach an agreement,” Cutler said.
“If someone is at the table and they really feel unjustly treated, it’s hard to make them move, do what you want to do,” she added.
What the world could see, Cutler said, is that the countries could turn to multilateral trade agreements, such as Regionally comprehensive economic partnership and A comprehensive and progressive agreement for a trans-pacific partnership. Now she is not a party in any agreement.
She noticed that Hong Kong expressed an interest in joining RCEP, And CPTPP has successfully concluded the acknowledgment of the UK, adding: “I expect other countries to express interest … I don’t think it’s about the question that the EU may even think about joining CPTPP. It’s a new world outside.”
Chaos policy?
But, as the world’s largest economy, it is hard to imagine that the countries are all ties to the USA
As such, one question would be, if the Earth must move trade tensions with the US, so that it should do so, especially with Trump that constantly changes attitudes on the tariffs.
Stephen Olson, a visiting senior colleague at the Iseas-Yusof Ishak Institute, said on Tuesday to CNBC Da Trump “Zig-Zags” on tariffs because he believes that, holding trade partners on the edge, he works in favor of America.
Trump “repeatedly stated that he thinks that one of his greatest assets is his unpredictability, and he thinks he is succeeding in chaos situations. So when everyone else in the world is running around with fire, Trump thinks it works in his favor,” Olson said.
Olson indicated that he felt a little sense of us with the Allies “trying to discern the thread of logic” in Trump’s trade policy. “My advice would be … Don’t try,” Olson said.
Asked how long Trump can hold the “Zig-Zagging” attitude about trade policy, Olson said the US president did not seek “solid, concrete resolution”.
Instead, Trump probably “wanted to keep trading partners always in a hot seat and that they always have a Damocles sword hanging over their heads.”
The White House spokesman was not immediately available for comment when they were contacted by CNBC.
– Abby Ryanto CNBC has contributed to this report.
