Will Europe pivot to Asia on trade?

Europe is considering all its options as President Donald Trump prepares to end the 90-day pause on the massive new tariffs he announced in April. One possible strategy for the EU could be pivoting to Asia as a primary trade partner.

“‘Goodbye Trump, hello Asia” is Europe’s new trade plan, said Politico. EU President Ursula von der Leyen wants Europe to team up with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — a 12-country trade group that includes Japan and Australia — to form a “coalition of the willing” that currently accounts for 30% of world trade. The plan would demonstrate that free trade is “possible on a rules-based foundation,” said von der Leyen.

China may also benefit. The EU has long “moved in lockstep” with the United States to present a united front against Beijing on trade and other issues, but Europe and China could benefit from teaming up in “blunting the impact from Trump’s tariffs,” said ABC News. The two sides will meet later this month, despite Europe’s concerns about China’s “human rights record, espionage, trade policies, military buildup and support for Russia.”

What did the commentators say?

Europe and Asia built their economies on a free trade foundation that is “under threat,” said Columbia University economist Shang-Jin Wei at Asialink. Cooperation between the two regions makes sense “given that everyone will suffer from these shocks.” Von der Leyen’s proposed partnership with the CPTPP “would establish trading rules for almost the whole world” that would be able to sidestep the “irresponsible behavior” of any single country. Building that new system will be challenging, but “the alternative will be far costlier to Asia and Europe.”

There have been “years of stalled efforts” to jump-start Euro-Asian economic partnerships, said Brian P. Klein at The South China Morning Post. But a partnership now is among the “shrinking number of options” to “buffer both regional economies” from Trump’s trade wars. The U.S. is not the only problem: China’s economy is “not in great shape” and cannot absorb exports that its Asian neighbors were previously shipping to America. That creates a “rare opportunity” for European and Asian countries to get a deal done.

What next?

Negotiators from the U.S. and Europe spent the weekend haggling over a “skeletal trade deal” that would spare the EU the worst of the 50% tariffs Trump originally threatened, said The Washington Post. EU officials are angry at the situation. Trump’s trade war is “madness,” said one unidentified European official. The new tariffs will not help the “wider global supply chains or the overall global economy.”

The whole world is scrambling to mitigate the consequences of Trump’s tariffs, Akanksha Sinha said at The Diplomat. The muddle could lead to a new order of “middle powers leading global economic growth.” That would have sounded “fantastical” not long ago, “but apparently a lot can happen in 90 days.”