In the short time since his inauguration, President Donald Trump has upended vast swaths of international politics. On January 23 in a televised message, President Trump unequivocally promised the annual World Economic Forum in Davos that he would follow through on his “America First” agenda in matters of global trade. The president pronounced, “My message to every business in the world is very simple: Come make your product in America and we will give you among the lowest taxes of any nation on earth. But if you don’t make your product in America . . . then, very simply, you will have to pay a tariff.” In his remarks, the president specifically called out the European Union, noting that “they put tariffs on things we want to do,” like cars and American agricultural products.
The president’s Davos comments only exacerbated existing European anxieties about the direction of the United States-European Union relationship that has already been strained by the new president’s other proclamations vis-à-vis Ukraine as well as NATO. As pundits have observed, there is a realization among European leaders that Trump is now stronger both at home and abroad than during his first term and, therefore, he is more likely to achieve success in pursuing his “America First” agenda.
However, the root source of this fissure in the relationship between the U.S. and the European Union goes back much farther. Today’s European Union was born out of the post-World War Two rules-based liberal international order and the EU has remained committed to it throughout the post-Cold War era. President Trump’s “America First” agenda, on the other hand, is grounded in a nationalist and populist movement that rejects the assumptions and institutions of the liberal, rules-based, globalist order. This disconnect of worldviews was clearly articulated by President Trump’s Secretary of State, Marco Rubio, in his January 15 confirmation testimony before the Senate Foreign Relations Committee:
“Out of the triumphalism of the end of the Cold War emerged a bipartisan consensus, and this consensus was that we had reached the end of history, that all of the nations of the world would now become members of the democratic Western-led community; that a foreign policy that served the national interest could now be replaced by one that served the liberal world order; and that all mankind was now destined to abandon national sovereignty and national identity and would instead become one human family and citizens of the world. This wasn’t just a fantasy. We now know it was a dangerous delusion.“
Where US-EU relations are headed in the next four years remains to be seen. It is a good bet, however, that tensions will not go away, and may indeed intensify. Having said that, it is helpful to place the current moment of US-EU relations in historical perspective.
Throughout the post-war period, farm policies and agriculture have played an outsized role in the economic relationship between the United States and Europe and have generated an ongoing source of tension. In 1959 the General Agreement on Tariffs and Trade (GATT) – the forerunner of the World Trade Organization – sponsored its fifth trade liberalization negotiation. The modest success of this Round, ending in 1962, was overshadowed that same year by the creation of the European Economic Community’s [EEC] Common Agricultural Policy (CAP) which was intended to provide economic support for Europe’s politically important farming sector.
CAP emerged just as U.S. poultry producers were expanding into the burgeoning European market. U.S. poultry exports grew from $13 million in 1957 – the year the EEC was formed – to $50 million in 1962. The impact of U.S. imports on poultry farmers in Germany, Italy, the Netherlands and France was devastating. The EEC responded by imposing a levy of 45% on U.S. poultry imports resulting in a dramatic decline in U.S. poultry exports. In terms of the economic balance sheet, the U.S. clearly lost what became known as the “Chicken War.” However, these short-term economic losses were overshadowed by the longer-term political ramifications of a deep divorce between America and Europe. Henceforth, Washington would no longer allow economic disputes with its European allies to take a back seat to the mutuality of interests that they shared regarding military-security issues.
President Kennedy’s call for an equal partnership between the US and Europe, based on shared responsibilities, had been undermined by Europe’s exploitation of American free trade. Assessing the outcome of the Chicken War, Assistant Secretary of State for European Affairs, William Tyler, stated:
“Who . . . can argue that such recent actions as the sudden arbitrary increase in the [European Economic] Community’s levy on poultry imports are necessary in order to build or preserve the unity of Europe? In our view such actions, which take no account of the legitimate interests of agricultural producers among the Community’s partners, lack that central element of responsibility which I spoke of earlier: Unless we approach these as common problems and deal with them in common – and not simply as a function of the internal pressures to which all of us are subject – it is difficult to see how we can move forward along the road to partnership.”
Looking ahead, there can be no doubt that economic issues will continue to play a major role and source of tension in United States-European relations. The United States and the European Union’s remain each other’s largest trading partner, with annual trade totaling over $1.3 trillion. This is not a bilateral relationship the U.S. can take for granted, a conclusion as unavoidable in the 1960s as it is today.
In the realm of international relations, President Trump’s “America First” agenda will no doubt continue to overturn the assumptions and institutions of the rules-based global order that have shaped the international system for the past eighty years. His tariff threats at Davos are evidence of that. However, it is doubtful that the edifice of rules and institutions that have been nurtured after World War Two will collapse completely. Even if it means a trade deficit with Europe, our great nation still needs economically and militarily strong allies to thrive, prosper, and secure peace.