Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Right, let's bring in
Speaker 1: then our conversation and turn our attention to Anthony Gardner,
Speaker 1: who joins US now, who served as US Ambassador to
Speaker 1: the EU between twenty fourteen and twenty seventeen under President Obama. Ambassador,
Speaker 1: good morning, and thank you so much for joining us.
Speaker 1: You are currently a senior advisor at Brunswick Group. I
Speaker 1: know that you've hopped straight from Bloomberg Television to Bloomberg Radio,
Speaker 1: so I really appreciate it. I could not listen in
Speaker 1: to TV, so perhaps I'll be asking you some of
Speaker 1: the same sorts of questions, but I know that our
Speaker 1: audio audience would really like to understand from you in
Speaker 1: your role as you had it. How you see the
Speaker 1: situation now with Donald Trump in the White House saying
Speaker 1: that US harris will definitely be imposed on the EU?
Speaker 1: Is that your expectation. We've seen a flip flop on Canada, Mexico, Columbia,
Speaker 1: but taris imposed on China. Where does the EU stand
Speaker 1: in this?
Speaker 2: Well, it's great to be on the program. I suspect that, yes,
Speaker 2: he will impose tariffs on the European Union because he
Speaker 2: bears a special animus against the European Union. He's described
Speaker 2: them as worse than China, but smaller. He's particularly unhappy
Speaker 2: with the German trade surplus, and in a lot of
Speaker 2: the countries that great trade surplus, and so we all
Speaker 2: know he believes trade surpluses are evidence of cheating. So
Speaker 2: I think he is going to impose tariffs on the EU,
Speaker 2: and I think it's a very sad mistake because when
Speaker 2: I was in office, and by the way, during many
Speaker 2: Republic administrations, the focus was on reducing trade bearers and
Speaker 2: not creating more of them. This time, the European Union
Speaker 2: is more prepared than it was last time. It's got
Speaker 2: lists of retaliation that it can put into place pretty quickly,
Speaker 2: a trade tool kit as they call it, as much
Speaker 2: stronger than it was in the first term. He will
Speaker 2: want to negotiate. It will negotiate that it did in
Speaker 2: the first term. But we'll try to promise and assuage
Speaker 2: Trump by buying more American goods, including like last time,
Speaker 2: soybeans and LNG, probably throwing a bit of defense and weaponry,
Speaker 2: but that probably will not be enough. It will try
Speaker 2: to say, did Donald Trump, look, we're doing more on trade,
Speaker 2: which sorry, on defense, which is what you wanted us
Speaker 2: to do. Look at the statistics. We can work more
Speaker 2: together on a positive extend on China, on export controls,
Speaker 2: on supply chain resilience, and writing the world trading rules
Speaker 2: and standardization organizations. None of that, I think is going
Speaker 2: to be enough for Donald Trump. So I suspect we
Speaker 2: will see tariffs which are going to have a very
Speaker 2: negative effect on many, not only exporters, but on manufacturers.
Speaker 3: President Trump has characteristically been highly vociferous in his criticisms
Speaker 3: of that try deficit with the EU from your US
Speaker 3: right if as someone who was very closely involved in
Speaker 3: transatlantic trade negotiations during your term, are any of his
Speaker 3: complaints about the trade relationship between the two two blocks warranted?
Speaker 2: Well, in some instances, the EU has tariffs hired in
Speaker 2: the United States. But look what he doesn't say. It
Speaker 2: was pretty obvious in the United States is tariffs and
Speaker 2: someone seas is higher than the ones the EU places. Yes,
Speaker 2: it is true that the EU's agricultural market is relatively closed.
Speaker 2: But you know what he doesn't mention, which is also obvious.
Speaker 2: There are many parts of our economy the United States,
Speaker 2: which are pretty close too. I'm picking public procurements and
Speaker 2: by American and buy America, maritime trade, coastal trade, which
Speaker 2: is the Jones Act. There are many other areas which
Speaker 2: this administration ever mentioned. It is false to say the
Speaker 2: EU is a completely closed market. It's still relatively open
Speaker 2: on public procurement. I would argue it's more open than
Speaker 2: the United States. So, you know, we can go back
Speaker 2: and forth on a ping pong you know, discussion of
Speaker 2: who's more open and who's not. But what's fundamentally false
Speaker 2: is to say they want to country runs a trade
Speaker 2: surplus with another country, that means it is cheating. It's
Speaker 2: just not the case. There are many other reasons why
Speaker 2: the United States runs a massive trade deficit with almost
Speaker 2: the entire world, and it has nothing to do with
Speaker 2: who is cheating and who isn't. So my view is
Speaker 2: we should be putting more efforts into addressing specific you know,
Speaker 2: arguments about you know, certain tariffs, making trade liberalized, and
Speaker 2: not just on tariffs. By the way, there are a
Speaker 2: lot of things that we can be working on to
Speaker 2: facilitate trade transatlantically with our best partner. And by the way,
Speaker 2: one of the things that trade does that Trump doesn't like,
Speaker 2: and here I would agree is in some instances countries
Speaker 2: are not respecting high degree of protection, whether it's on
Speaker 2: labor or well under the deministration, was the environment and
Speaker 2: IP those are the kind of restrictions that we should
Speaker 2: be tearing down to ensure that the level you know
Speaker 2: that there's a level play field.
Speaker 1: HM. But reasoned arguments have not particularly worked. What has
Speaker 1: worked is caving to a very transactional relationship. If you
Speaker 1: look at the you know, the phone call between Shinebaum
Speaker 1: and Trump or between Canada and the US. That is
Speaker 1: what has actually worked. What would be the most effective
Speaker 1: pain point for Europe to target Trump with if it
Speaker 1: wants their message to be heard.
Speaker 2: Well, services trade. You know, the US runs a surplus
Speaker 2: with Europe on services. It runs a deficit on goods trade,
Speaker 2: but services is the opposite. So no doubt the EU
Speaker 2: is looking at services trade. If it really really wanted
Speaker 2: to get tough, they could do something on procurement because
Speaker 2: this is a massive market in Europe and is relatively
Speaker 2: more open. And I think the the United States could say, look,
Speaker 2: if Americans, the US companies want to participate in the
Speaker 2: massive procurement market EU, you have to drop tariff that
Speaker 2: gets pretty that gets pretty tough and aggressive. I think
Speaker 2: they want to avoid that, but it's there.
Speaker 3: And let's assume for a moment then that the tariffs
Speaker 3: do get imposed in some form or other on a
Speaker 3: you goods A lot of them are you know, the
Speaker 3: goods the EU exports the US are extremely popular. I'm
Speaker 3: thinking here particularly say cars, What impact do you expect
Speaker 3: that they would actually have? Will consumers US consumers stop
Speaker 3: buying your pin cars?
Speaker 2: Well, you know, the picture there is extremely complex, as
Speaker 2: you know and your listeners know, because a lot of
Speaker 2: europe manufacturers actually manufactured cars in the United States. So
Speaker 2: it depends on the manufacturing question. Some are more exposed
Speaker 2: partly there, importing both cars and car parts from Mexico
Speaker 2: and Canada and so forth, so they may get impacted more.
Speaker 2: Some European manufacturers do in DBA export cars from Europe
Speaker 2: the United States, but more and more many of them
Speaker 2: have been making significant number of cars in the United States.
Speaker 2: So yes, there will be a shift to probably more
Speaker 2: production in the United States if you manufacturers have made
Speaker 2: those announcements recently. But that doesn't mean that you know,
Speaker 2: tariffs could be These are great things. More jobs in
Speaker 2: that state because over the longer term, it makes us
Speaker 2: less competitive and it will make prices rise. You know,
Speaker 2: taxes that sorry tariffs are a regressive tax, a tax
Speaker 2: that's the least well off pay more in general. So
Speaker 2: it'll be interesting to see when people actually feel this
Speaker 2: in their pocket book. It may not be immediate, but
Speaker 2: it will happen.
Speaker 1: In terms of the UK, do you think that Britain
Speaker 1: is really going to be excluded or is it a
Speaker 1: matter of time? Is it something that comes in perhaps
Speaker 1: further down the line when the US looks at this.
Speaker 1: I mean that the government at the moment is trying
Speaker 1: to focus on the advantages of being both close to
Speaker 1: the EU and the US. Is obviously an argument that
Speaker 1: the UK could end up isolated by these massive kind
Speaker 1: of partners trading blocks.
Speaker 2: What's your view on the UK now, Well, yeah, I
Speaker 2: don't agree with that argument. You know, there was a
Speaker 2: lot of comfort that the UK had for being inside
Speaker 2: a big tent. And it's not only because the EU
Speaker 2: is an effective trade negotiator. It can get much more
Speaker 2: leverage in the trade negotiations. Look, we saw it recently
Speaker 2: with Amercrosore. We started recently with the EU's updated agreement
Speaker 2: with Mexico, the ease negotiating a lot of other agreements
Speaker 2: across the world. Yes, the UK is doing it as well,
Speaker 2: but the EU drives a much much better bargain. Being
Speaker 2: inside that tent, it gave the UK a certain amount,
Speaker 2: a certain number of significant benefits. So the UK is
Speaker 2: now out. So yes, it's trying to do the splits,
Speaker 2: striving a little bit of each. I suspect the US
Speaker 2: whether Trump will say to the UK, make a choice
Speaker 2: either with US or against US. And by the way,
Speaker 2: that means not aligning with any of the E regulations,
Speaker 2: but aligning with US regulations on a number of issues,
Speaker 2: including on food, on agrifood. That's going to be a
Speaker 2: really difficult moment for the UK because then it will
Speaker 2: bear a significant price in terms of goods experts to
Speaker 2: its biggest market, which is the EU market. So the
Speaker 2: answer to your question is, this is a really tough
Speaker 2: line to walk, and it's not without a price.
Speaker 3: And on that then on on the UK again, let's
Speaker 3: let's let's assume that that the premise doesn't manage to
Speaker 3: walk that that very tough line, and that some form
Speaker 3: of tariffs are slapped on UK goods. What are the
Speaker 3: potential sort of pinch points for the UK line to
Speaker 3: be Where where might the Trump administration target and similarly,
Speaker 3: what sort of retaliatory measures might we anticipate.
Speaker 2: Gosh, I don't want to speculate on that. I mean,
Speaker 2: we saw already last time, you know, tariffs. I think
Speaker 2: it was on some drinks trade and so on. But
Speaker 2: I don't want to speculut which things are going to
Speaker 2: be selected by the Trump nor what kind of retaliation
Speaker 2: there will be, So I will I will respectfully pass
Speaker 2: on that question. I hope we can avoid it because
Speaker 2: it is, as I mentioned, I think it's a destructive
Speaker 2: to a causeitive trading relationship.
Speaker 1: Ambassador, just briefly, and lastly, do you think that the
Speaker 1: role of US ambassadors is changing? Obviously, you know it
Speaker 1: was a job that you held and clearly enjoyed for
Speaker 1: a long time. Do you think that the role of
Speaker 1: US ambassadors will change onto the second Trump administration?
Speaker 2: Oh, that's a very sad question. Look, the role of
Speaker 2: ambassadors has been evolving, not just under Trump, by the way,
Speaker 2: It's been kind of a bipartisan issue for a long time.
Speaker 2: We are sending, unfortunately too often abroad envoys who know
Speaker 2: very very little and are there just because they gave money,
Speaker 2: contributed to campaigns or to the inauguration so forth. This
Speaker 2: is a very very negative trend. You know, in some
Speaker 2: cases it doesn't matter because the relationship with a particular
Speaker 2: country is so strong that you can you with it
Speaker 2: with professionals from the home base s iety Washington. But
Speaker 2: in some cases where things get heated, and obviously we're
Speaker 2: about to hit that kind of a situation very soon
Speaker 2: with Europe and potentially with the UK, you do need
Speaker 2: envoys who actually know what they're talking about, and who
Speaker 2: can have be the eyes and ears and be the
Speaker 2: intelligent set of eyes and ears beyond what Washington can
Speaker 2: already gather