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Trans-Atlantic Scorecard – September 2018

European Commission President Jean-Claude Juncker and U.S. President Donald Trump

Brookings - Robert Bosch Foundation Transatlantic Initiative

Welcome to the first edition of the Trans-Atlantic Scorecard, a new quarterly evaluation of U.S.-European relations produced by Brookings’s Center on the United States and Europe (CUSE), as part of the Brookings – Robert Bosch Foundation Transatlantic Initiative.

To produce the Scorecard, we polled Brookings experts on the present state of U.S. relations with Europe—overall and in the political, security, and economic dimensions—as well as on the state of U.S. relations with five key countries and the European Union itself. We also asked about several major issues in the news. The poll for this edition of the survey was conducted September 4-10, 2018.

The experts’ analysis is complemented by a Snapshot of the relationship over the previous three calendar months, including a timeline of significant moments, a tracker of President Trump’s telephone conversations with European leaders, figures presenting data relevant to the relationship, and CUSE Director Thomas Wright’s take on what to watch in the coming months.

Snapshot

Timeline

June 1
The United States imposed steel and aluminum tariffs on the European Union, Canada, and Mexico, ostensibly on national security grounds, after announcing waivers for those partners will not be extended.
June 1
Giuseppe Conte took office as Italian prime minister leading a Five Star Movement – League coalition following March 4 elections.
June 2
Socialist leader Pedro Sánchez was sworn in as prime minister of Spain after vote of no confidence brought down Mariano Rajoy’s Popular Party government.
June 5
U.S. Assistant Secretary of State for European and Eurasian Affairs A. Wess Mitchell laid out the Trump administration’s Europe strategy in a speech at the Heritage Foundation entitled “Anchoring the Western Alliance.”
June 8-9
President Trump clashed with the leaders of Canada, the European Union, France, Germany, Japan, and the United Kingdom at the G-7 summit in Quebec. Trump called for Russia to be readmitted to the group, which Conte seconded. Trump left early to travel to Singapore for his summit with North Korean leader Kim Jong-un and instructed U.S. representatives not to sign the summit communique.
June 12
Greek Prime Minister Alexis Tsipras and Macedonian Prime Minister Zoran Zaev finalized a U.S. and EU-supported deal to resolve the long-running “name dispute,” opening path to potential membership for the Republic of North Macedonia in NATO and EU.
June 13
In a speech in Berlin, German Foreign Minister Heiko Maas laid out his vision for “Europe United” as a response to “Donald Trump’s egoistic policy of ‘America First,’ Russia’s attacks on international law and state sovereignty, and the expansion of the giant that is China.”
June 19
President Trump met with Spanish King Felipe VI at the White House.
June 21
U.S. Assistant Secretary of State for European and Eurasian Affairs A. Wess Mitchell gave another speech on U.S. strategy towards Europe at Carnegie Europe in Brussels, following stops in Bucharest, Zagreb, and Prague. He argued “our task is to ensure that the West as a whole is stronger for geopolitical competition that will be more intense than we could have foreseen at the end of the Cold War.”
June 24
In an election that marked Turkey’s transition from a parliamentary to a presidential system, President Erdoğan won reelection in the first round. His Justice and Development Party (AKP) maintained control of parliament thanks to an alliance with the Nationalist Movement Party (MHP).
June 27
President Trump met with Portuguese President Marcelo Rebelo de Sousa at the White House.
June 28
At a European Council summit in Brussels, EU leaders agreed to measures to reduce illegal border crossings by migrants, including plans for migrants rescued at sea to be processed in centers outside of Europe. This helped defuse a political challenge to German Chancellor Angela Merkel from her interior minister, Horst Seehofer of the Bavarian Christian Social Union (CSU).
July 2
President Trump met with Dutch Prime Minister Mark Rutte at the White House.
July 5
The EU extended sectoral sanctions on Russia linked to Moscow’s implementation of the Minsk agreements until January 31, 2019.
July 6
The U.K. cabinet agreed to proposals for a “softer Brexit” with a U.K.-EU free trade area.
July 8
U.K. Secretary of State for Exiting the European Union David Davis resigned over Prime Minister May’s approach to Brexit. He was replaced by Dominic Raab.
July 9
U.K. Foreign Secretary Boris Johnson resigned over Prime Minister May’s approach to Brexit. He was replaced by Jeremy Hunt.
July 11-12
At the Brussels Summit, NATO member leaders invited “the government in Skopje” to begin accession talks, endorsed a package of measures to address security threats emanating from the Middle East and North Africa, and stressed commitment to a forward presence in the eastern part of the alliance. President Trump called Germany “a captive of Russia” given its energy deals with Moscow. He also prompted an emergency session on defense spending, pressuring allies to spend 2 percent of GDP on defense immediately and further raise spending to 4 percent of GDP. Trump met President Macron and Chancellor Merkel on the sidelines of the summit.
July 13
President Trump met with Prime Minister May in London and praised the U.S.-U.K. relationship in a press conference, though he sharply criticized May’s Brexit strategy in an interview with The Sun. Trump also met Queen Elizabeth II for tea at Windsor Castle. Trump’s visit was greeted by large protests.
July 13
Special Counsel Robert Mueller indicted 12 Russian intelligence officers in the hacking of the Democratic National Committee and Hillary Clinton’s presidential campaign.
July 16
Presidents Trump and Putin met in Helsinki, Finland for a bilateral summit. After meeting privately with only interpreters for two hours, Trump and Putin held a joint press conference in which they expressed confidence that the United States and Russia were entering a period of better relations. Trump’s statements, including his refusal to confront Putin over Russian influence operations in U.S. elections, drew bipartisan criticism from U.S. lawmakers. Trump also met with Finnish President Sauli Niinistö.
July 16
Meeting with Chinese President Xi Jinping in Beijing, European Council President Donald Tusk and European Commission President Jean-Claude Juncker agreed to further develop a strategic partnership with China to uphold the multilateral rules-based order and engage in WTO reform, among other issues.
July 17
European Council President Donald Tusk and European Commission President Jean-Claude Juncker signed an ambitious free trade agreement with Japan. The FTA is the largest signed by the EU and is set to eliminate $1.2 billion in tariffs faced by EU companies when it goes into effect in 2019, should it be ratified.
July 17
President Trump briefed members of Congress on his trip to Europe, clarifying “I accept our intelligence community’s conclusion that Russia’s meddling in the 2016 election took place. Could be other people also; there’s a lot of people out there.”
July 19
The White House announced that President Trump has asked National Security Advisor John Bolton to invite President Putin to Washington this fall for a follow-up meeting.
July 25
President Trump met with European Commission President Jean-Claude Juncker at the White House. In a subsequent press conference, they announced a moratorium on new tariffs and plans to work towards “zero” tariffs, barriers, and subsidies. Juncker said the EU would import more U.S. liquefied natural gas.
July 28
In his annual speech at a Hungarian youth festival in neighboring Romania, Hungarian Prime Minister Viktor Orbán designated his new government’s task as building a “new era.” He called on Europe to rediscover its Christian foundations and turn away from the “elite of ’68” to embrace illiberal democracy along the lines of the Hungarian model.
July 30
President Trump met with Italian Prime Minister Giuseppe Conte at the White House.
August 1
The Trump administration imposed sanctions on Turkish Justice Minister Abdulhamit Gül and Turkish Interior Minister Süleyman Soylu under the Global Magnitsky Act in response to the continued detention of American pastor Andrew Brunson.
August 8
The Trump administration announced new sanctions on Russia in response to the poisoning of former spy Sergei Skripal in the United Kingdom. The new sanctions limit the export to Russia of goods and technology considered to be sensitive for U.S. national security.
August 10
In response to Turkey’s continued refusal to release Brunson from house arrest and return him to the United States, President Trump announced a doubling of U.S. steel and aluminum tariffs on Turkey.
August 21
German Foreign Minister Heiko Maas published an op-ed in Handelsblatt, arguing Europeans “must form a counterweight” when the United States “crosses the line” and that to protect European companies from U.S. sanctions, Europe should establish payment channels independent of the United States.
August 21
The United States deported 95-year-old former concentration camp guard Jakiw Palij to Germany, following months of negotiations between German and American officials.
August 21
U.S. Vice President Mike Pence met with U.K. Foreign Secretary Jeremy Hunt at the White House.
August 25
U.S. Senator John McCain, the Republican nominee in the 2008 presidential election and a champion of the trans-Atlantic alliance and U.S. support for democracy in Eastern Europe, passed away 13 months after being diagnosed with brain cancer. Amidst other tributes, several former NATO secretary generals called for the alliance’s new headquarters to be named for McCain.
August 27
In a speech to the French Conference of Ambassadors, President Macron warned that Europe can no longer rely upon the United States for its military defense and called for the rapid creation of a new European security policy. He argued populist victories indicated a need to overhaul global governance and make globalization more “human.”
August 30
EU Trade Commissioner Cecilia Malmström tells European Parliament’s trade committee that the EU would drop all tariffs on automobiles, if the United States were to do the same. Auto tariffs, which President Trump threatened again at a rally in West Virginia on August 21, have caused considerable concern in countries like Germany and Japan, both of which are major automotive exporters.
August 30
In an interview with Bloomberg, President Trump repeated his criticism of the World Trade Organization as biased against the United States and threatened to withdraw.

Europe on the line

Tracking President Trump’s reported phone conversations with European leaders.

 

Between June 1 and August 31, 2018, President Trump spoke on the phone with French President Macron 3 times (June 1, June 15, August 11), Turkish President Erdoğan twice (June 26, July 16), U.K. Prime Minister May once (June 4), German Chancellor Merkel once (August 27), and Hungarian Prime Minister Orbán once (June 16). He last spoke on the phone with Russian President Putin on March 20.

 

Europe on the line

 

We track Trump’s phone calls with the leaders of France, Germany, Russia, Turkey, and the United Kingdom, whether they have spoken or not, as well as other calls with European leaders of which we are aware. The White House stopped releasing readouts of the president’s calls with foreign leaders in July 2018. If we’ve missed a conversation, please give us a ring. Source: whitehouse.gov, elysee.fr, bundeskanzlerin.de, gov.uk, en.kremlin.ru, tccb.gov.tr/en.

Figures

U.S.-EU reciprocal tariffs

 

European Union tariffs on U.S. goods are higher overall than vice-versa, notably on agricultural products and cars. Yet U.S. tariffs are higher on certain products, such as light trucks (a classification for trucks weighing up to 8,500 pounds, including SUVs). This tariff regime has coexisted with a sizable EU trade-in-goods surplus with the United States—in 2017, the EU exported 53 percent more to the United States than it imported, with a surplus of $151 billion. Some sectors are more imbalanced than others—EU exports of cars and light trucks are five times the value of U.S. exports ($51 billion versus $10 billion in 2017).

 

The Trump administration’s June 2018 imposition of a 25 percent tariff on steel and a 10 percent tariff on aluminum—with a national security justification—prompted Brussels to impose retaliatory tariffs amounting to an equal estimated value ($1.6 billion) on a wide range of U.S. products including textiles, motorcycles, alcohol, juice, playing cards, and a range of steel products (some targeting key Republican leaders’ constituencies). President Trump has threatened several times to impose steep tariffs on foreign cars. The July 25 meeting between Trump and European Commission President Jean-Claude Juncker resulted in a ceasefire, with Trump promising they would “work together toward zero tariffs” after Juncker promised Europe would import more American soybeans and liquified natural gas. But as Bruce Jones noted in responding to the survey for this Scorecard, “The trade war is in a ceasefire; it remains to be seen whether the ceasefire will hold, collapse, or turn into a ‘peace’ agreement.”

 

 

NATO defense expenditures as percentage of GDP—8 largest economies and total GDP, 2011-2018

 

Following Russia’s seizure of Crimea in March 2014, which increased threat perceptions toward Moscow, NATO has sought to reassure allies on its eastern frontier by moving forces east and increasing combat readiness. Member states committed at the September 2014 Wales Summit to spend 2 percent of GDP on defense by 2024. President Trump has repeatedly stressed the need for allies to rapidly increase defense spending. Some, like Latvia, Lithuania, and Romania, have sharply increased spending, but the increases for the largest economies in NATO are more modest. Total NATO defense spending as a percentage of GDP is down over the course of the decade, and from 2014, in large part because of decreased U.S. defense spending.

 

 

What to watch

Center on the United States and Europe Director Thomas Wright lays out events, issues, and potential developments to watch for in the months ahead.

 

I am delighted to share with you the first edition of the Trans-Atlantic Scorecard, a new quarterly evaluation of U.S.-European relations produced by Brookings’s Center on the United States and Europe, as part of the Brookings – Robert Bosch Foundation Transatlantic Initiative.

 

The summer brought a ceasefire of sorts in President Trump’s struggle with America’s European allies. Yes, President Trump had a catastrophic summit with President Putin in Helsinki and threatened to pull out of NATO, but a trade war has been averted for now, and Trump has declared victory on NATO defense spending. The wider Trump administration continues to have some success in maintaining America’s traditional commitments to Europe. What we’ll be watching for is if this ceasefire holds and evolves into a stable cooperative relationship or if it is temporary and blows up.

 

My expectation is it will not last. Trump is hardwired for confrontation with Europe, particularly the European Union. And, there are plenty of landmines out there—on trade and the Middle East in particular. We’ll also be watching for how European leaders respond. There has been a notable shift in the past six months—most now believe the only way to make progress with Trump is to speak his language of leverage and strength. But going from theory to practice will be difficult and risky.

 

We’ll also be closely watching President Trump’s trip to France for Armistice Day on November 11. He has announced he’ll attend the military parade, but he will also be there at the time of President Macron’s Paris Peace Forum to celebrate global governance. We can’t imagine that President Trump, or National Security Advisor John Bolton, will be enthusiastic participants.

 

We hope you find the Trans-Atlantic Scorecard a useful resource.

Trans-Atlantic Scorecard maintained by Sam Denney, Filippos Letsas, and Ted Reinert. Additional research by Nicoleta Nichifor. Digital design and web development by Eric Abalahin, Yohann Paris, Rachel Slattery, and Cameron Zotter.