Jeanna Smialek
Appearances
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
Because I actually, I think that is absolutely the case. I think there's also a more complicated dimension here though, which is that I think we're going to see both companies and countries trying to figure out what other markets they might access to replace American consumers. I think we're seeing that a lot in Europe right now. I think...
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
Europe, one of their big strategies for dealing with this very large problem that they have been presented with is to go find new friends. They are just sort of making the rounds, going all around the world, trying to figure out, you know, who they can buddy up with to try and make sure that they have a consumer market to sell their products into.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
I think it was symbolically relevant that Ursula von der Leyen, the president of the European Commission, was actually in Central Asia talking about trade when this all went down.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
Yeah, we're in retaliation mode already over here. So we were early movers on the retaliation front.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
Enormous. When you think about the EU as a block, actually all 27 countries that form it, it is the U.S. 's biggest trading partner, essentially. And when it comes to services, it actually buys a lot more services from the U.S. than it sells into the U.S.,
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
When we say services, we mean things like financial services, you know, banking services. But most importantly, we mean technology services, the cloud, the Google searches. And the reason that that's so relevant is what we've seen so far is that the European Union has very much retaliated by announcing additional tariffs on goods.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
It has said that it's going to put tariffs on things like whiskey and motorcycles and women's lingerie and a whole list of products. But what we know from our reporting, what we're hearing about from our sources over here is that they are also very much considering slapping some kind of trade barrier on services.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
This would really be sort of crossing a Rubicon that the European Union hasn't previously crossed, but it could potentially be really powerful and it could have the real risk of escalating this trade war pretty significantly.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
That essentially is what it might mean. So we saw a French official today suggest that this would be some version of a tax on information services, on Internet technologies. This is very much the kind of thing that is clearly still under development. They've been trying to keep it under wraps.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And so I think we're still waiting for the final actual retaliation to come through to try and understand exactly what this would look like in real life.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And I want to just add, I think it's not an accident that Europe is talking about tech in particular. I think it's partially because that industry is so affiliated with the White House right now. because they have been doing this ingratiation exercise because they've made friends with the Trump White House.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And so I think the idea is if you hit tech, you're hitting X, you're hitting meta, you're potentially hitting these big tech companies that have got CEOs who are really close to the president. And that might be an effective way to really sort of force the White House to come to the negotiating table, which for Europe is the end goal.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And I just want to point out that there's another big question here, which is, can they even do this? You know, it's not like Google has an alternative in Europe. It's not like they have services that can just easily plop in and fill the void that is going to be left by some of these things.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And so there's this real risk of how do you design a response that doesn't hurt your own consumer base in a way that makes it almost unsustainable to carry this out? And so it's an untried tool, and it's going to be really challenging for them to actually use.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
So hopefully I won't be run out of Brussels for saying this, but I think that the best case scenario for Europe could actually be really positive here. I think there's a world in which some sort of negotiated settlement happens fairly quickly. You get some tariffs down on certain products. This is the optimistic, the administration just wants to make a deal scenario. Trade basically resumes.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And in the meantime... Europe has made this whole new friend group. They've expanded the posse. They have really sort of had this moment of sort of standing up and having political will and figuring out how to sort of grow some of their own industries in a world where they thought the U.S. was really going to sort of fade as a trading partner.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
So they emerged from this a little bit more independent, a little bit stronger. And potentially Europe's economy, which has really been in the doldrums for years, now has this extra impetus for innovation and, you know, particularly coming from some of the manufacturing stuff tied to defense that's happening right now. But I think there's a positive outcome here.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
I think there's also an extremely negative scenario, which is they get locked in a sort of tit-for-tat retaliation where both sides are just escalating, hoping that somebody finally blinks. But it takes a really long time for that to happen. And in the process, Europeans are facing much more expensive products. They're facing lack of access to services.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
They are watching companies really do layoffs because they are no longer able to sell into the American market. And that would all be extremely painful at a moment where Europe is already struggling economically and already feeling a little bit isolated. You know, we've already had Brexit. Russia has obviously taken a much more aggressive and much less friendly tone toward the West in general.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
I think we could end up in a really bad place where they are in a really unfortunate position and potentially dealing with a big influx of cheap goods from China all at the same time.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
are claiming it is i'm joking no no argument at all i think this is a massive deal i had someone earlier actually tell me that this is one of those before and after days you know we're going to remember the world before today and we're going to remember the world after it and it just sort of you know this is a moment that is going to fundamentally reorder the global economy potentially
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And I think at the same time, I mean, I'm sitting in Europe right now where this is part of what is really a multi-pronged assault on the transatlantic relationship. This is part of a sort of decoupling that is happening between the U.S. and its trading partner, the European Union, which has, you know, for 80 years been among its closest allies.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And so I think it's hard to overstate what this means diplomatically and not just economically.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
coming on the air because the stock market is plummeting in response to President Trump's escalating trade war.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
Retail stocks in particular really selling off. Nike, Adidas, Lululemon.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
So I think there are several reasons. I think one is that there are these strategic goals the Trump administration wants to get Europe to bend on. It wants them to change their digital regulation policies. It wants them to change some of their taxation policies. And so I think the goal is to negotiate on some of that.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
I think there are also a few key industries that the administration cares about a lot that do matter in Europe. Cars are one of them. We definitely see this desire to reshore the automobile industry. And there are some really big car industries in Europe. Think BMW, you know, think the Audis of the world.
The Daily
Fear and Fury: The Fallout From Trump’s Tariffs
And so I think in this sort of multi-pronged trade war, Europe is very clearly in the crosshairs for reasons that are partially trade and economic related and partially actually quite a bit broader than that.