The View From Davos is a daily newsletter featuring insight from our Senior Advisors, Partners and Directors at The World Economic Forum Annual Meeting 2020.
Ambassador Anthony Gardner, Senior Advisor
Former US Ambassador to the EU
TURNING TO EUROPE
Another year, another Davos. Every year there are meta-themes and subsidiary themes that occupy the global elite in the Congress Centre and the many meetings around town. This year, in addition to the handwringing about the global climate crisis and rising global inequality, I was struck by how many of my high-level business and government interlocutors are focused on the new EU Commission’s policy program.In particular, the common questions that appear to preoccupy them include: will the new Commission under President von der Leyen succeed in its aim to make the EU more “geopolitical”? If so, how will this new strategic focus evidence itself? Will the search for EU “sovereignty” and “autonomy” morph into an industrial strategy that will, either directly or indirectly, shut out non-EU competitors?
The meeting between President von der Leyen and President Trump in Davos appeared to go well enough. But it is well known that Trump sees the transatlantic trade relationship only through the prism of the EU surpluses in goods trade — ignoring the significant US surplus in the flow of services and income from US business affiliates in Europe. It is unlikely that he will give up easily on his demand that the EU fix the perceived trade gap.
The consensus among experts appears to be that the US is unlikely to impose import tariffs on EU cars, thereby sparing German auto manufacturers and the risk of a major transatlantic bust-up. But there are other hand grenades lying around, waiting to explode. The WTO decision on the Airbus complaint against Boeing is expected soon. The White House is assuming that the level of permissible retaliation will be much lower than in the case of Boeing’s complaint against Airbus, but Commissioner Hogan has warned Washington that he has other WTO compliant retaliation “in his back pocket.”