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US President threatens to end all trade with Spain · THE DAILY BRIEF

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  Speaker 1: So the NATO summit was supposed to be about unity,
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  Speaker 1: but Donald Trump has used the occasion to turn on
• 0:06
  Speaker 1: an ally. But why why now? And how how does
• 0:11
  Speaker 1: he plan to punish this NATO ally? Well, he's threatened
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  Speaker 1: to cut off trade, all of it, all in the
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  Speaker 1: name of inflicting pain on Spain.
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  Speaker 2: Spain is a wasted cause. We don't want to do
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  Speaker 2: any trade business with Spain anymore. By the way, like
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  Speaker 2: you to cut it a Spain is a terrible partner
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  Speaker 2: in NATO. They don't participate, they don't pay. I don't
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  Speaker 2: want anything to do with Spain. Cut off all trade
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  Speaker 2: with Spain, blits, including visits. Okay, we don't want anything
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  Speaker 2: to do watch them, watch them come running back or
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  Speaker 2: they'll come running back. They treat this man terribly. And
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  Speaker 2: you shouldn't carry him. I mean you sort of automatically
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  Speaker 2: carry because if you're protecting in areas or they're there,
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  Speaker 2: so they probably figured they have to protect us, right,
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  Speaker 2: but we don't have to and we don't have to
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  Speaker 2: trade with them. I don't want to do any more
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  Speaker 2: trade with them, all right, take it immediately, don't even
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  Speaker 2: talk job. They're hopeless bad people.
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  Speaker 1: Meanwhile, also at the NATO summit, Spain's leader Pedro Sanchez
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  Speaker 1: told the press his country's relationship with the US couldn't
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  Speaker 1: be better, pretty much brushing off the threats, arguing that
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  Speaker 1: Spain is part of the EU, which acts as a
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  Speaker 1: block on trade disputes, so this isn't really a matter
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  Speaker 1: for Spain. Well. Francis Burwell is Managing director and head
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  Speaker 1: of Research at McClarty, a group advising clients on US
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  Speaker 1: EU relations, currently a Distinguished Fellow with the Atlantic Council's
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  Speaker 1: Future Europe Initiative, spent productive time at Oxford as well.
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  Speaker 1: I might add, Francis, great, you could potentially spend some
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  Speaker 1: productive time with us to talk more about this transatlantic spat.
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  Speaker 1: Let's start with the basics. Can Donald Trump holt trade
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  Speaker 1: with Spain?
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  Speaker 3: I suppose technically he could. He could try to embargo
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  Speaker 3: Spanish goods. The problem is that, well, there are several problems,
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  Speaker 3: but one big problem is what happens after he does that, right,
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  Speaker 3: and the EU as a trading block does not distinguish
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  Speaker 3: between Spanish goods and other goods from the EU that
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  Speaker 3: are going.
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  Speaker 4: To the United States.
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  Speaker 3: I suppose that he tried to embargo goods from Spain.
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  Speaker 5: Many Spanish goods would just go to.
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  Speaker 3: France or Italy or Portugal and then come to the
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  Speaker 3: United States. But even if he could, if customs and
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  Speaker 3: border patrol could identify the goods, the EU is likely
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  Speaker 3: to retaliate as a block And not only.
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  Speaker 4: Would that be the retaliation would.
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  Speaker 3: Be harmful for US interests, but it could very well
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  Speaker 3: be the death of the Turnberry Agreement, which is the
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  Speaker 3: new US EU trade agreement which limits EU tear us
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  Speaker 3: into the United States US tariffs on the EU goods
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  Speaker 3: to fifteen percent, and where the EU has just agreed
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  Speaker 3: to reduce tariffs on industrial goods for the United States
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  Speaker 3: to zero.
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  Speaker 4: So there's quite a high cost.
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  Speaker 5: I would also.
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  Speaker 3: Point to out that President Trump has previously also singled
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  Speaker 3: out Spain, and there was apparently some work done in
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  Speaker 3: the US government and then nothing ever happened in terms
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  Speaker 3: of blocking Spanish trades specifically. Finally, we have actually a
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  Speaker 3: trade surplus with the Spanish. It's not a big one,
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  Speaker 3: it's about five billion dollars, but that's different from the
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  Speaker 3: EU overall, where we have a significant trade deficit.
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  Speaker 1: Right, So you laying out a great case for my
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  Speaker 1: fellow up question that Donald Trump has formed in that
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  Speaker 1: he uses these big eventstitu trades off allies and enemies alike.
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  Speaker 1: But why lash out after all you've just told me
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  Speaker 1: and you make the case beautifully, Why lash out again?
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  Speaker 1: It's spine now.
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  Speaker 5: Well, you know, Donald Trump.
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  Speaker 3: Places a lot of emphasis on personal relationships with other
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  Speaker 3: leaders and also on their willingness to flatter him.
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  Speaker 5: So I think Pedro Sanchoz he is a.
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  Speaker 3: Socialist, one of the few government leaders in Europe right
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  Speaker 3: now who is socialist.
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  Speaker 5: And he also has made no bones.
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  Speaker 3: About criticizing the Trump administration for a variety of things.
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  Speaker 3: He has called the Israeli attacks in Galaza genocide, and
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  Speaker 3: he has very much criticized the US Israeli operations in Iran.
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  Speaker 4: I think it's also.
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  Speaker 3: Something that you know, I don't know personally if they
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  Speaker 3: get along, but Prime Minister Sanchez has not been reserved
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  Speaker 3: in his criticism of Donald Trump.
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  Speaker 1: Yeah what amastok? You're willing to put in that there's
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  Speaker 1: something in this about Spain agreeing to buy oil from
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  Speaker 1: other countries but not from the US. Does that argument
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  Speaker 1: make sense to you?
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  Speaker 5: It could?
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  Speaker 3: I think also Spain has become a leading force for
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  Speaker 3: renewables within the EU, which is something that.
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  Speaker 4: The Trump administration does not look on favorably.
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  Speaker 3: But in this case, I suspect that really the reason
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  Speaker 3: is the criticism that Prime Minister Sanchez has leveled at
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  Speaker 3: President Trump and at the decisions that he has made.
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  Speaker 3: I think it is also true that as a politician
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  Speaker 3: who's been in office for a while, I think Prime
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  Speaker 3: Minister Sanchez has been in power for seven or eight
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  Speaker 3: years now, he is facing a number of corruption scandals.
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  Speaker 4: Of people close to him, not he personally.
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  Speaker 3: People close to him, including his wife, and faces declining
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  Speaker 3: favorability readings in Spain while they're facing an election and
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  Speaker 3: in twenty seven, I believe, and it plays well in Spain.
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  Speaker 3: Most Spaniards do not approve Donald Trump, they do not
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  Speaker 3: approve of us A Israeli operations in Iran, and so
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  Speaker 3: this plays to the voters, if you.
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  Speaker 4: Will, yeah for the Prime Minister.
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  Speaker 1: There's certainly a lot of the contrast there, particularly most
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  Speaker 1: recently on immigration as well, Spain having made legal the
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  Speaker 1: Living and Working Agreement with people more than a million
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  Speaker 1: living in Spain. I want to just before I move on,
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  Speaker 1: your company Advisors Trade Partners, I wonder has Trump And
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  Speaker 1: has the administration learned their lesson on global trade? Do
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  Speaker 1: they still see trade as a weapon to beat other
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  Speaker 1: countries with As you're advising partners, the people you're advising,
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  Speaker 1: are they weary of the Trump administration and they're fixed
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  Speaker 1: on the international trade Well, I think you have.
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  Speaker 4: To look at the difference between what is said and
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  Speaker 4: what is done.
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  Speaker 3: And the President says a lot of things, and particularly
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  Speaker 3: early in the administration, you did see the impact of that.
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  Speaker 5: But because of decisions like the Supreme Court decision on the.
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  Speaker 4: First batch of tariffs, the so called AEPA tariffs, that
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  Speaker 4: those were invalid were now on a different set of tariffs, and.
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  Speaker 5: The administration has organized.
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  Speaker 3: A successor successor set of tariffs to the current ones
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  Speaker 3: because they have a time moment on them. But for
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  Speaker 3: Europe this has now stabilized at about fifteen percent tariffs.
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  Speaker 3: And I think that most businesses that trade across the
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  Speaker 3: Atlantic have.
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  Speaker 4: Kind of figured this out.
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  Speaker 3: And what business is really one is predictability, so they
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  Speaker 3: don't there is anxiousness about what the President might say.
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  Speaker 3: There is anxiety about what could be coming down the
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  Speaker 3: road that we don't know yet. For example, there was
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  Speaker 3: a section three oh one investigation launched on Germany because
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  Speaker 3: of prices on pharmacy pharmaceutical goods.
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  Speaker 5: Two weeks ago. So there are things like that that
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  Speaker 5: are destabilizing.
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  Speaker 3: But I think that businesses are paying more attention now
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  Speaker 3: to not what is said, but the announcements that are
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  Speaker 3: coming out of the White House USTR Commerce Department.
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  Speaker 4: Places.
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  Speaker 1: You've read my mind as to my next question, the
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  Speaker 1: thought bobl I sort of want to get you to
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  Speaker 1: bounce off if possible. It's what is said and what
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  Speaker 1: is done sphere from the client point of view, but
• 9:02
  Speaker 1: from the international point of view. So Trump's second term
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  Speaker 1: is five hundred and thirty four days old, and making
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  Speaker 1: really grandiose threats is an important part of his really
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  Speaker 1: unorthodox diplomatic playbook. He is previously, for example, threatened over
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  Speaker 1: the Panama Canal that he would take over that country's
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  Speaker 1: one of their financial lifelines and the globally significant man
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  Speaker 1: made Badway. He has repeatedly expressed his wish to annex
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  Speaker 1: Canada and make it the fifty first state. Donald Trump
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  Speaker 1: has also threatened military action against Cuba, like he did
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  Speaker 1: with Venezuela. My question for our distinguished expert is is
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  Speaker 1: there a chance that after five hundred and thirty four
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  Speaker 1: days of this hyperbolic Trump two point zero administration, that
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  Speaker 1: the rest of the world is becoming a little jaded
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  Speaker 1: by these threats and more inclined to just let him
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  Speaker 1: blow off steam and not react as quickly or as
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  Speaker 1: much as they may have earlier in this Trump.
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  Speaker 4: Well, I certainly, as a frequent visitor to Brussels and
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  Speaker 4: other places in Iran, have noted that where early in
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  Speaker 4: the administration you could feel a sense of.
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  Speaker 3: Panic, you now get much more of a sense of, well,
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  Speaker 3: let's see if it actually happens. And that's not to
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  Speaker 3: say that the rhetoric doesn't have an impact. The president's
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  Speaker 3: rhetoric about Greenland has had a very serious impact on
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  Speaker 3: religions with Denmark and other European countries, and we saw
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  Speaker 3: that again at this summit at the NATO summit.
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  Speaker 5: But I do think that people.
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  Speaker 3: Are much more inclined to look and see if it's
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  Speaker 3: going to happen, and to think of some of his
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  Speaker 3: statements as his attempt to create bargaining leverage, and then
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  Speaker 3: they have.
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  Speaker 4: To decide how they want to respond in that negotiation.
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  Speaker 3: So it is different from what it was in the
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  Speaker 3: first six months in terms of the impact. But I
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  Speaker 3: wouldn't want to dismiss the statements as not having any
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  Speaker 3: impact at all, because they certainly do.
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  Speaker 1: That's said, you're inclined to think that Spain would be
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  Speaker 1: taking that stance on this latest comment at NITA that
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  Speaker 1: he wants to cut off Old Tried with Spain, well, I.
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  Speaker 3: Think that's a Spanish are probably listening as well to
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  Speaker 3: their Prime Minister, even though he's not very popular, who
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  Speaker 3: said that.
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  Speaker 5: It was overall relations were very positive. I do think that.
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  Speaker 3: Not only in Spain but across Europe there is more
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  Speaker 3: of a sense of autonomy from the United States. I'm
• 11:42
  Speaker 3: looking at legislation like the proposals like the Industrial Accelerator Act,
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  Speaker 3: the New Cloud and AI Development Act, which are clearly
• 11:51
  Speaker 3: aimed at China, but also it's not China's not named.
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  Speaker 3: And it is also about keeping risky partners out of
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  Speaker 3: your supply chains or putting limits, making sure you have
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  Speaker 3: resilience and duplication in case partners become unreliable.
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  Speaker 1: So there is.
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  Speaker 3: Much more of that, and I think you saw it
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  Speaker 3: at the NATO summit too, because in the declaration and
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  Speaker 3: throughout including there was a defense forum, a defense industry forum.
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  Speaker 3: On the sidelines, you saw much more emphasis by the
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  Speaker 3: European countries on what they were doing about defense spending,
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  Speaker 3: but not just spending, but actually going with a Swedish
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  Speaker 3: surveillance plane rather than going back to an American one.
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  Speaker 3: So I think there are things like this that are
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  Speaker 3: happening more and more.
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  Speaker 1: In your Francis great to talk Managing director and head
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  Speaker 1: of research at mcclatty. Great you could spend some time
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  Speaker 1: with us to talk more about this transatlantic spect Thanks
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  Speaker 1: so much for your input, Thanks so much for asking me,
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  Speaker 1: and very much wondering what train of thought you're on
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  Speaker 1: for this one. Do you think Donald trump arrangement syndrome
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  Speaker 1: is being replaced by fatigue for his constant threats like
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  Speaker 1: his latest against Spain. Druppy thoughts in the comments from Berlin.
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  Speaker 1: It's by for now