President Donald Trump’s multifront trade offensive will eventually lead to higher tariffs in aggregate around the world, said Ian Bremmer, a pioneer in modern-day geopolitical risk analysis.
“When all is said and done, tariffs will end up a little higher because the ability of the United States to take the Europeans to task … is going to be challenging,” the Eurasia Group president told “Squawk on the Street” on Friday.
The president has said that standing tough on trade will result in lower tariffs, and what he hopes one day will be the elimination of tariffs entirely.
“Trump has a hard time with multilateral institutions,” Bremmer argued as a reason why the president’s actions against the European Union in the form of imposed steel and aluminum tariffs and threatened auto duties may run into trouble.
Unlike with China, which exchanged $34 billion worth of tariffs with the U.S. just after midnight Friday, a one-size-fits-all solution won’t work with the EU because of all the competing constituencies, he said.
Twenty-eight countries, including Germany, France, and Italy, make up the European Union. Britain, which has voted to leave the EU, remains a full member as Brexit negotiations continue.
“The EU is the world’s largest trading bloc,” Bremmer pointed out. “It’s not going away.”
In dealing with China, even before Friday’s tariffs went into effect, Trump threatened on Thursday additional trade measures on more than $500 billion of Chinese goods, the total amount that China imported into the U.S. last year.
“Of course, he’s threatening that. He threatens stuff all the time. He threatened to build a [border] wall that the Mexicans were going to pay for,” said Bremmer.
The Eurasia founder said it’s “extraordinarily unlikely” that the trade war with China will escalate that far.
Trump’s hardball tactics have gotten “more from the Chinese than the Obama administration … in terms of saying, ‘We’re going to be buying more goods from you,’” Bremmer acknowledged.
However, he predicted the current White House will seek a trade resolution with China after the November midterm elections, in which Republicans will fight to keep their majorities on Capitol Hill in both the House and the Senate.
The president needs to look strong on China to invigorate his base of voters who swept him into office based on his America-first rhetoric, Bremmer said. “Timing matters in everything, but especially in politics.”
