Emmanuel Macron is hopping mad. France’s petit president is furious about Trump’s trade deal with the EU; members of his government are calling on its fellow EU members to use a legal measure called the “anti-coercion instrument” to blow it up. It would allow EU officials the ability to restrict exports, limit foreign investment and even possibly ban some U.S. businesses from competing in Europe.
Why is Macron so outraged? First, it’s largely for show, as I explain below, but also because Trump’s trade deal exposes what polite elites would prefer no one mention – France, and the EU in general – has no power, no clout and have dug themselves into a deep, deep hole.
Axios published a list this morning of the globe’s 10 biggest companies. Six are American, starting with Walmart, the world’s largest, while 3 are Chinese; the tenth is Saudi Arabia’s Aramco. Not one is from the EU.
Maybe that’s not too surprising, since companies in the U.S. and China benefit from having large home-grown consumer markets. But the EU does too. Collectively its consumer market is larger than China’s, $10 trillion to China’s $8 trillion. Of course, neither comes close to the U.S. consumer market, which weighs in at $20 trillion.
Macron and his French colleagues have been the most outspokenly hostile to the U.S. deal, with furious officials calling the agreement “submission”. The reason? The deal allows some U.S. agricultural exports to the block of 27 nations, with zero tariffs, which threatens France’s protected farmers. (Fun fact -I once visited Deere & Company many years ago when I worked on Wall Street; the CEO laughingly referred to the French as “gardeners”, not farmers. The average size of a French farm is 170 acres; the entire country could practically be swallowed up by one of our 100,000 acre midwestern mega-farms.)
While several industries scored zero-for-zero tariffs, like airplane makers and semiconductor equipment, France’s wine industry received no such exemption. Apparently, negotiations continue to get a reprieve for producers of Champagne and Cognac and other wines (and for their American consumers.)
Cosmetics, too, got hit with the 15% duties; previously, those products could be shipped to the U.S. tax free.
Rankling French officials is that their country lost out to Germany, which angled for and won better terms for its all-important car makers. The deal lowers tariffs to 15% from 25% for automakers like Volkswagen and Mercedes, a great relief in the competitive market.
But, really, it’s all about politics. Macron is hoping that a big show of resistance will boost his popularity. His party does not have control of the government, having lost out to the right in a snap election called last year; the country is in the midst of political gridlock.
Macron’s approval rating, according to a Morning Consult survey conducted earlier this month, stands at 18%, tied for lowest with the head of the Czech Republic. Not one EU leader earns a score as high as Donald Trump at 40%, but Macron is in the basement. Here’s the poll.
No wonder he’s so angry.
