Us President Donald Trump Listens as Indian Prime Minister Narendra Modi Speaks during a joint press conference in the East Room at the White House on February 13, 2025 in Washington, dc.
Alex Wong | Getty Images News | Getty Images
Tariffs from us president donald trump could push allies to forge closer relationship with other countes like China and India, according to forrmer us diplomat wandy Cutler.
It comes amid the US President’s Threat to Levy steep tarifs on european alcohol products, after The european union said it would impose Counter tarifs on 26 billion euros ($ 28.33 billion) Worth of US Goods Starting in April.
The 27-Nation Block’s Tariff Measures Followed Us Duties on All Steel and Aluminum Imports.
Trump’s Trade Policies, which appear designed to rebalance the economy in America’s favorite, include targeted tarifs against canada, mexico and china.
Speaking to cnbc’s “Squawk Box Asia“on Thursday, cutler, who formerly served as acting deputy us trade representative, pointed out that traditional us allies, such as the eu had announced” a verya as the eu had announce
Cutler said “the eu had concluded a big deal With the Mercosur Countries. The eu and India are going to restart their negotiations. “
MERCOSUR is the Spanish Abbreviation for the Southern Common Market, A Regional Trade Block Made Up of Argentina, Bolivia, Brazil, Paraguay and Uruguay.
The eu Finalized negotiations with the mercosur count in December, a political agreement that the Center for Strategic and International Studies Described As a “landmark deal” and the only one mercosur has with a Major Trading Block.
CSIS Estimated that The Deal Eliminates Tariffs on Over 90% of Bilateral Trade, Saveing European Exporters 4 Billion Euros Annually While Granting South American Products Presucts Presucts Presucts Presucts to European Markets. It added that this means “European products will enter its market under much better conditions than us or japanese products.”
‘China can help’
Competing Powers, Such as China, Are Also Wooing Other Countries, Cutler Said, Highlighting that the world’s second-largest economy has upgraded its upgraded and free-tracks.
“It’s Making Overtures to Other Countries, and if our partners can’t relay on us.
Cutler is not the only person to sugges europe may be looking elsewhere as tensions between the US and the region escalate.
“The reality is, in the broadest sense of the word, europe has to look for alternative markets to the us china can help,” David Roche, Strategist at Quantum Strategy, Told CNBC Earlier this month.
Photo illustration of euro and us dollar banknotes in the Netherlands on 14 July 2022. Trader Worries about Continued Agrassive Monetary Tightening.
Nicolas Economou | Nurphoto | Getty Images
“One thing i’ve learned at the negotiating table, you do need to have a respect and trust if you’re going to reach a deal,” Cutler said.
“If someone’s at the table and they really feel that they’ve been unfairly treated, it’s hard to get them to move, to do what you want them to do,” She added.
What the World Might See, Cutler said, is that countries might turn to multilateral trade agreements, such as the Regional Comprehensive Economic Partnership and Comprehensive and Progressive Agreement for Trans-Pacific PartnershipThe us is not party to either the agreement.
She noted that Hong kong has expressed interest in joining the rCEP, And the CPTPP successfully concluded the admission of the UK, Adding: “I expect other counts to express interest … I don’t think it’s ut of the question that perhaps the eu Eveen Thinks about joining CPTPP. It’s a new world out there. “
Policy of Chaos?
But, as the world’s largest economy, it is different to envision countings cutting all trade ties with the us
As such, one question would be, if a country needs to Navigate Trade Tensions with the Us, how should it do it do it, especially with trumply shifting stancs on tarifs.
Stephen olson, visiting Senior Fellow at the ISEAS-Yusof ISHAK Institute, Told CNBC TUSDAY TRUMP “ZIG-ZAGS” on Tariffs BeCause He BELIEVEs that by keeping trading, Works in America’s favorite.
Trump has “reepeatedly stated that he thinks one of his greenst assets is his unpredentability, and he thinks that he thrives under situations of chaos. So when everyone else in the world is the world Their hair set on fire, trump thoughts that work to his advantage, “Olson said.
Olson indicated he felt there was little point in us allies “Trying to discurn a thread of logic” in trump’s trade policy. “My Advice would be … Don’t Bother,” Olson said.
Asked how long trump may maintain a stance of “zig-zagging” on trade policy, olson said the US president is not looking for “Solid, concrete resolutions.”
INTEAD, Trump is Likely “Looking to Keep Trade Partners Always in the Hot Seat, and to Always have that Sword of Damocles Hanging Over their heads.”
A White House Spokesperson was not immediatily available to comment when contacted by CNBC.
– CNBC’s Abby Ryanto Contributed to this Report.
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