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The president of the United States, Donald Trump, listens while the Indian Prime Minister, Narendra Modi, speaks during a joint press conference in the East Room of the White House on February 13, 2025 in Washington, DC.
Alex Wong | Getty Images News | Getty images
The tariffs of the president of the United States, Donald Trump, could push the allies to forge closer relations with other countries such as China and India, according to former American diplomat Wendy Cutler.
It occurs in the midst of the threat of the president of the United States to raise steep tariffs on European alcohol products, after The European Union said It would impose Counter rates at 26 billion euros ($ 28.33 billion) for the value of US goods from April.
The rate measures of the 27 -nations block followed American tariffs in all imports of steel and aluminum.
Trump’s commercial policies, which seem designed to rebalance the economic order in favor of the United States, include specific tariffs against Canada, Mexico and China.
Talking to CNBC “Squawk Box Asia“On Thursday, Cutler, who previously served as an interim deputy American commercial representative, said that the traditional allies of the United States, as the EU had announced” a very ambitious negotiation strategy. “
Cutler said: “The EU had completed a What a thing With Mercosur countries. The EU and India will restart their negotiations. “
Mercosur is the Spanish abbreviation of the South Common Market, a regional commercial block composed of Argentina, Bolivia, Brazil, Paraguay and Uruguay.
Issue Negotiations finished with Mercosur countries In December, a political agreement that the Center for Strategic and International Studies described As a “historical agreement” and the only one that Mercosur has with an important commercial block.
CSIS estimated that the agreement eliminates tariffs on more than 90% of bilateral trade, saving European exporters of 4 billion euros per year while providing South American preferential access products to European markets. He added that this means that “European products will enter their market in much better conditions than US or Japanese products.”
‘China can help’
Competitive powers, such as China, are also courting other countries, said Cutler, highlighting that the second largest economy in the world has improved their free trade agreement with the Asean region.
“Obertures to other countries, and if our partners cannot trust us. Do you guess what? These other countries, including China, look more attractive.”
Cutler is not the only person who suggests that Europe can be looking for another place as tensions between the United States and the region intensify.
“The reality is that, in the broadest sense of the word, Europe has to look He told CNBC Earlier this month.
Photographic Illustration of US euro and dollar bills in the Netherlands on July 14, 2022. The US dollar languished about a minimum of three weeks to the main companions on Thursday after the president of the Federal Reserve, Jerome Powell, the worries of the merchants continued about the continuous aggressive monetary hardening.
Nicolas Economou | Nurphoto | Getty images
“One thing I have learned at the negotiating table, you need to have respect and trust if you are going to reach an agreement,” said Cutler.
“If someone is at the table and really feels that they have been unfairly treated, it is difficult to make them move, to do what you want to do,” he added.
What the world could see, said Cutler, is that countries could resort to multilateral trade agreements, such as Regional Integral Economic Association and Comprehensive and progressive agreement for the Trans-Pacific Association. The United States is not part of any of the agreements.
She noticed that Hong Kong has expressed interest in joining the RCEP, And the CPPPP successfully concluded the admission of the United Kingdom, adding: “I hope that other countries express interest … I do not think it is out of discussion that the EU may even think about joining CPPPP. It is a new world.”
Chaos policy?
But, like the world’s largest economy, it is difficult to imagine that countries cut all commercial ties with the United States
As such, a question would be, if a country needs to navigate commercial tensions with the US.
Stephen Olson, visiting the main member of the Iseas-Yusof Ishak Institute, told CNBC on Tuesday that Trump “Zig-Zags” in rates because he believes that keeping commercial partners on the limit, works in favor of the United States.
Trump “has repeatedly declared that he believes that one of his greatest assets is his unpredictability, and believes that he prosperss under chaos situations. So, when everyone else in the world is running with his burning hair, Trump thinks he works for his advantage,” said Olson.
Olson said he felt that it made little sense in American allies “trying to discern a thread of logic” in Trump’s commercial policy. “My advice would be … Don’t bother,” said Olson.
When asked how long Trump can maintain a “zig-zagging position in commercial policy, Olson said that the president of the United States is not looking for” solid and concrete resolutions. “
On the other hand, Trump is likely to “seek to keep the commercial partners always in the hot seat, and always have that Damocles sword hanging on their heads.”
A White House spokesman was not immediately available to comment when CNBC contacted.
– Abby Ryanto de CNBC contributed to this report.
