Did Trump Trade Wars Just Escalate to Germ Warfare?

Europeans are feeling like President Trump just dropped a COVID-19 economic bomb on the European Union. In response to his March 11th talk from the Oval Office, EU leaders said they did not see this coming. Was this a COVERT economic attack on the EU as some in the EU think?

If you break down what President Trump said and did, it smells a bit like economic warfare that has capitalized on the coronavirus outbreak. It was certainly taken that way by American investors who focused entirely on the policy’s economic impact on European commerce.

The most pungent evidence of EU trade targeting emitted from the president’s sole exclusion of the UK from his 30-day ban on travel between Europe and the United States. The president explained, when questioned as to why he excluded the United Kingdom, that it was because the UK has done a good job of keeping the virus down and because it now has solid borders between it and the EU.

President Donald Trump on Thursday said he excluded the United Kingdom from a travel ban since the country is doing a “very good job” — even as coronavirus cases there rose and two more people died.

MarketWatch

That is where all of Europe stood two days before the president gave his talk. Cleary the UK is much better than four European nations — Germany, France, Spain and Italy. Just as clearly, the UK is not any better than Sweden, Norway, Finland, or the Netherlands and is worse than Poland, Portugal, Switzerland, Austria and Greece, and far worse than nearly all of Eastern Europe. Of course, the president did refer to the EU’s open borders as being part of the problem.

Thus, the president’s statement appears to some to be a cover for why he is hitting the EU with this travel ban but not the UK. We know he is working a cooperative trade deal with the UK, and the EU is not cooperating with him in his trade war in the way he would like. The UK, on the other hand, has almost as many cases of COVID-19 as the US among a much smaller population!

The UK has reported a total of 798 coronavirus cases and eleven deaths linked to the virus…. The UK has seen a rising number of cases of “community spread”: people with no known exposure to others with the virus or travel history to countries where outbreaks have been reported…. There were 208 new cases of the virus as of Friday morning, the Department for Health and Social Care has announced. This was the biggest single-day increase in cases since the outbreak started in the UK.

Business Insider

WHO declares Europe the new coronavirus epicenter.

In Trump’s defense, the largely European World Health Organization, declared Europe the new ground zero of the COVID-19 pandemic.

Europe has become the new epicenter of the COVID-19 pandemic as cases in China slow and the deadly coronavirus runs through Italy and nearby countries, WHO officials said Friday. WHO officials declared COVID-19 a global pandemic on Wednesday as the virus spreads rapidly across the world from Asia to Europe, the Middle East and now parts of the United States….

More cases are now being reported [in Europe] every day than were reported in China at the height of its epidemic,” WHO Director-General Dr. Tedros Adhanom Ghebreyesus said at a news conference at the organization’s Geneva headquarters….

Italy currently has the most cases outside of China with at least 15,113 infections, followed by Spain at 4,334, Germany at 3,156 and France at 2,882.

CNBC

That is a pretty strong defense, coming out of the neutral center of Europe as it does. On the other hand,

The World Health Organization (WHO) … has consistently maintained that international travel restrictions will prove ineffective—a stance supported by the fact that Italy, the hub of European contagion with more than 12,000 cases, was the first EU country to flout the WHO’s advice and ban flights to and from China, the source of the coronavirus.

Fortune

And, on what I guess would be a third hand, Trump received some odd reluctant support from his critics.

Traces of evidence that Trump dropped a COVID-19 bomb into the trade war

However, there is still more of a case to be made that this was a calculated trade move.

The president knew that the EU could not help but note how the UK, which is cooperating with the US, was treated deferentially. If the main concern was the virus, why not ban it, too and eliminate all contagion from Europe. It is not as if there is not a lot of physical contact between the UK and EU nations.

The EU knows the UK is not that much more virus-free than many EU nations an noted as much. All EU nations have their own individual policies for combatting the disease because health is one area where the EU does not have much control over other nations. Thus, an EU-wide ban seems a little indiscriminate.

Part of the president’s European viral battle plan claimed Europe wasn’t doing enough. In the video above, the president says,

Taking early intense action, we have seen dramatically fewer cases of the virus in the United States than are now present in Europe. The European Union failed to take the same precautions and restrict travel from China and other hot spots. As a result a number of new clusters in the United States were seeded by travelers from Europe.

Many questioned what evidence there was to support “scapegoating” Europe, as some diplomats called it, as the source for contagion to the US. However, Trump got some support from his opposition on this one, though also with no evidence:

Sen. Tammy Duckworth (D-Ill.) told The Post, “It seems like of the 35 states that now have coronaviruses, 30 of them have originated in Europe, so I think it’s a wise move….” Democrats who were critical of the Europe ban primarily said they wished it had come earlier….

“I’m a little bit surprised because they don’t seem to ever miss an opportunity to be critical of the president,” said Sen. Kevin Cramer (R-ND). “People are at a level of fear right now where more dramatic protections probably if not fine with them are at least not open to much criticism.”

New York Post

As for the US doing so much better at taking precautions, the US has so far tested only five in every million people for coronavirus, hardly putting the US in a position to criticize Europe for not doing enough. Italy has taken far more intensive quarantine measures than the US.

Europe responded with comments everywhere as though they were incredulous or had been attacked:

The EU disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” the heads of the European Union said Thursday, expressing their displeasure….

European Council President Charles Michel and European Commission President Ursula von der Leyen spoke out Thursday, the morning after Trump abruptly announced his 30-day ban — rattling an already-shaken travel industry…. The president’s speech set off chaos at airports in Europe.

NPR

In Brussels, European officials and diplomats were furious.

“If he wants the EU to be the culprit, so be it. It’s erratic, unilateral and creates a lot of problems that are unnecessary,” one envoy fumed.

“Trump is simply kicking a man when he’s down. He wants to appear to be in control, but in seven days it will be clear that he is not,” he said, referring to the spread of the disease in America. “This is going to be serious. What airlines will still exist when this is all over…?”

Even Britain, which has left the EU and is itself exempt from Trump’s ban for now, expressed concern. “With regard to flight bans, we are always guided by the science as we make our decisions here,” finance minister Rishi Sunak told BBC radio. “The advice we are getting is that there isn’t evidence that interventions like closing borders or travel bans are going to have a material effect on the spread of the infection.”

Euractive

The British government does not back Trump’s ban. “We (don’t believe) that’s the right thing to do…. The evidence here doesn’t support that.”

USA Today

This is not about containment, this is about sending a political message. In a time where the EU is challenged to its core, the US is closing its borders and turning its back on allies,” tweeted Benjamin Haddad, director of the Future Europe Initiative at Atlantic Council.

Aljazeera

“There’s little value to European travel restrictions,” Tom Bossert, Trump’s former homeland security adviser, said in a series of tweets Thursday morning. “Poor use of time and energy. Earlier, yes. Now, travel restrictions/screening are less useful. We have nearly as much disease here in the US as the countries in Europe.”

Mother Jones

Even Trump defended himself on not talking to European leaders in advance by tying his actions to trade concerns:

On Thursday, Trump not only contradicted his own statement about communicating with allies, telling reporters that he didn’t consult European leaders before his speech, but he also implied the diplomatic affront was meant as payback.

Trump suggested the lack of communication was justified because European countries don’t inform him when they raise taxes on the US. “When they raise taxes on us, they don’t consult us and I think that’s probably one in the same,” Trump said.

A top European diplomat who told CNN they received word of the ban literally moments before the speech said they were given no further information. “That’s all we know. Total lack of clarity. Tons of confusion….”

Several European ambassadors in Washington tell CNN they didn’t know the announcement was coming and were blindsided by it, despite having been in contact with the administration over the last few days….

“When we got the news, though the European Union seemed to be a scapegoat, we got to work figuring it out.”

CNN

Of course, a senior diplomat of Team Obama described Trump’s actions as war:

Trump Has ‘Declared War’ on Europe

President Donald Trump has declared war on Europe—yet again. In his address to the nation on the coronavirus, Trump pointedly stated that Europe had “seeded” pockets of infection in the United States and that therefore he would stop direct flights from there. Once again, Europe is his bogeyman.

It would be hard to find another example of a U.S. president taking such an important decision with serious consequences for key allies in an insulting and unilateral manner with no prior consultation. This finger-pointing was a dramatic illustration of how the president has repeatedly belittled and undermined America’s most essential partners during his administration.

He offered zero sympathy for the plight of our European allies, some of whom, especially Italy, are in the throes of a dramatic humanitarian emergency. He offered zero leadership to rally a global partnership to address the crisis, in which our European allies would be critical partners. During the Ebola crisis in West Africa in 2014–2015, by contrast, the U.S. and the European Union worked extremely closely and successfully to stop the spread of infection.

His address seemed nakedly political: He exempted the United Kingdom and Ireland, our perceived special partners, even though both have many cases of the virus.

Barron’s

Another indication that Trump’s travel ban on the EU was a bomb in the trade-war salvo came in how he could not resist saying a ban on all cargo was also being considered — something the White House quickly took pains to walk back. In the video, Trump stated,

These prohibitions will not only apply to the tremendous amount of TRADE and cargo…. Anything coming from Europe to the United States is what we are discussing.

Why would you ban cargo when it could easily be quarantined for 72 hours upon landing, which is all the longer the virus can live on a surface, or when you can easily fill the cargo hold with ozonated air before taking flight? (If you’re that concerned.) It is not as though the disease lives in cargo and walks around and coughs for weeks as it does in a human being. Cargo is not known to be a dangerous spreader of disease.

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Germ warfare knows no boundaries

The trouble with germ warfare when we’re talking the real warfare of releasing germs (not my metaphorical use here whereby I am asking if he is exploiting a viral pandemic) is that germs do not respect borders. Germ warfare blows wherever the wind blows and can just as easily wipe out your own people if you don’t have an antidote.

Apparently, the president did not have the antidote he thought he had, which was the unswerving confidence of stock market bulls in the Trump Rally and the president’s hand to assure the rally is sustained. His talk was primarily meant to shore up the stock market that he has claimed as his badge of success. However, only moments after his speech concluded, market futures dove toward a cataclysmic opening for stocks, as investors clearly took his message of intensified commercial isolation from Europe more to heart than all his assurances of US aid to corporate America and US citizens.

The following day saw circuit breakers kicking in to try to slow the viral carnage as the president’s perceived attempt at using germs to break down the EU’s resistance to his trade war caused the stock market to collapse again in the worst one-day point crash in the history of the market — down more than 2,300 points on the Dow! With red showing on the boards everywhere, the market looked more like it had been hit with ebola than coronavirus. It ended as one of the top-three worst crashes percentage-wise, when matched with 1929, and 1987’s Black Monday. With his decisive move on Europe, Trump managed to take out all major indices into full bear markets, thereby putting a definite termination on “the longest bull market in history.”

Not bad for a backfiring speech. Jerome Powell couldn’t even match those negative results, and he’s backfired a lot lately. Trump managed to crash US markets as badly as he may have hoped to crash EU markets if suspicions about his trade intentions were right. If he thought his antidote was the second part of his speech, which talked about all he would do to give the market a booster of economic support, that turned out to be the biggest market miscalculation in history! It was a truly specatacular fail, given what Trump hoped to accomplish for his personal leading indicator of success. Regardless of possible trade intentions, I’m sure he believed his message of corporate aid would outweigh his message of inflicting more harm on international commerce and already beleaguered airlines. It did not.

The Guardian, a British newspaper, was quick to respond that the president’s surprise bomb at the center of the EU had blown up in his face:

Trump’s coronavirus ban on travel from the EU is backfiring already

His attempt last night to face facts, steady nerves and reassure the public succeeded in spreading panic, sowing confusion and ratcheting up the anxiety. The fact that Trump delivered a rare, live televised address to the nation should, by itself, have induced calm…. That he was ready to deploy one of the US presidency’s most powerful tools, usually reserved for moments of war or disaster – a TV address from the Oval Office – seemed to signal that he was, at last, facing reality….

But no sooner had that hope appeared than it faded away. For in the course of nine minutes, Trump swiftly reverted to type. He described Covid-19 as a “foreign virus”, and took pains to point out that “a large number of new clusters in the United States were seeded by travellers from Europe….”

America’s purity is permanently under threat of contamination by alien hordes…. It should hardly be a surprise that he uses [the alien threat] now in the context of disease….

Could it be a politically motivated swipe at the EU, which Trump once said he regarded as the US’s greatest “foe”, pointedly giving preferential treatment to Brexit Britain?

The Guardian

That’s from a European newspaper in Britain that benefits from the Trump exclusion.

It’s time for a trade-war ceasefire

If President Trump intended this, even in part, as a move to capitalize on the coronavirus by going deeper into trade wars at a time when the global economy is crashing into tiny fragmentation everywhere, it was one of the more deplorable things I’ve ever seen a US president do. Even if it was not intended as a trade bomb, it certainly wrecks havoc on an already failing economy. It’s a devastating move for the already beleaguered US airline industry and hospitality industry. They were standing on one leg, and then he shot that a one, which is largely why the stock market crash again right after.

In fact, if one doesn’t want to crash the entire US and global economy, now would be a time to declare, at least, a temporary cease fire in the trade war in order to regather economic strength and focus our energies less on fighting with other nations than with easily moving necessities around like food and medical supplies that people need in order to cope.

Our goal in what we are repeatedly told is a major global humanitarian crisis (even by the president now) should not be to see more Chinese and European people suffer or die in a viral pandemic because we maintain our squeeze on trade. We need to show we understand there are things more important in this world than trade wars, show some humanity and compassion and make this one of those extraordinary times when even enemies come together and help each other. (And it is not as if Europe is our enemy!)

Yet some of the nationalist hawks in his administration, who are engaged in a long-running struggle over China policy with the president’s more internationalist, dovish advisers, have been outspoken about how the public-health emergency could factor into Trump’s “America first” agenda.

The Atlantic

Some of Trump’s advisors have openly criticized China for what they have called a poor response to the coronavirus. Yet, China’s quarantine and testing of about as many people as there are in the entire United States and its mobile instant hospitals puts the US totally to shame.

His trade advisors have even stated that the viral threat will aid us in our trade war. So, it is reasonable to ask if Trump’s actions come from listening to these advisors tell him to seize the moment, and squeeze Europe harder.

If we want to exploit germs in trade warfare to win the Trump Trade War, perhaps we should keep this in mind:

China is the largest exporter of medical devices to the United States, and that about 80 percent of the active pharmaceutical ingredients in American drugs come from China and India…. “Chinese pharmaceutical firms have captured 97 percent of the U.S. market for antibiotics and more than 90 percent of the market for vitamin C … 95 percent of ibuprofen, 91 percent of hydrocortisone, 70 percent of acetaminophen….”

Those last words were from Trump’s trade war general, Peter Navarro, who was saying the pandemic emphasizes why we need to be harder on China in the trade war and break our dependence. I disagree with his timing. Yes, down the road we should, again, become tough on China, and we should certainly try to become less dependent on other nations for everything; but now is not the time to risk cutting off our largest supply lines of things necessary to save lives and limit suffering. Where might they be when we need them if this is how we act?

While Trump has lifted tariffs on medical supplies for the good of the US, that doesn’t mean that China can’t retaliate and exploit our weakness if we open a new germ warfare front in the Trump Trade Wars. They can simply ban such exports if that’s how we want to lead in playing this.

However, I think we should be less concerned about self-interest on that front and just do what is right for all humanity during a time when, regardless of how dangerous the disease is or is not, the economic outfall is dangerous for everyone.

It would be sociopathic to exploit a pandemic for trade benefits. If that costs me readers and supporters again to point out that there are reasons many are questioning if that is what Trump is up to, so be it. Some things are more important than money or success. We should be vigilant as to whether our president is going to exploit this crisis and encourage him not to if we think that is what he is doing.

“In crises like this, we have no allies,” Navarro noted on Fox News recently, alleging that Australia, Canada, and the United Kingdom “denied us what we needed” in terms of medical provisions during the 2009 swine-flu outbreak.”

So, this is payback? Navarro may just be stating that as a warning that we should not be dependent on China for medical supplies, but that’s not clear to me.

Well, we certainly won’t get any help with what we need with isolationism carried to such extremes that it causes us to keep crippling European economies that are now under great duress at a time when they need strength. Is that the kind of friend America wants to be? I don’t think that is America at its best at all.

So, declare a cease fire on all aspects of the trade war, at least until the pandemic is over. That will bolster our own strength as well to get on with battling disease, rather than crippling ourselves and others during a time of obvious extreme economic distress that this illness is bringing by how we choose (and need?) to respond to it. IF THE PRESIDENT WANTS TO DO SOMETHING THAT WOULD TRULY HELP ALL NATIONS, INCLUDING THE US, AT THIS TIME, A CEASEFIRE IN THE TRADE WAR WOULD BE THE BIGGEST ECONOMIC MOVE HE COULD MAKE. Don’t exploit the germ for warfare.

Maybe the following spiritual reminder, which comes from a broad perspective that people of all religions can generally agree on, will help us reflect on what is important:

Corona Virus – Is God unhappy with Mankind?

I chose that one because it is true for any of those faiths — that they hold teachings that remind us, in spite of our worst characteristics, that God wants humans to treat other humans with compassion and justice, and not to exploit their illnesses and suffering. It doesn’t mean we don’t have differences to negotiate strongly on such as even trade; but it does mean those things are less important than humanity, itself, when the human struggle becomes universally about protecting lives from a common enemy.

Even without that divine appeal, for those who are atheists, anyone can see the benefit and rightness of helping others during times of duress. I have seen America act that way many times, and I have read outpouring memorials of thanks for times when America has acted that way in history. I hope we will do so continually.

I’m not suggesting massive outpouring of international financial aid. I’m suggesting working together and removing economic constraints, rather than intentionally increasing hardship during a time when the entire global economy is straining to its breaking point. Put down our weapons and be what Americans have been at their best in times of need. Now is the time when Americans and Germans need to declare a temporary truce in the war and sing Silent Night across enemy lines as happened long ago between Germans and America’s allies in World War I:

Most accounts suggest the truce began with carol singing from the trenches on Christmas Eve, “a beautiful moonlit night, frost on the ground, white almost everywhere”, as Pvt. Albert Moren of the Second Queens Regiment recalled….

The next morning, in some places, German soldiers emerged from their trenches, calling out “Merry Christmas” in English. Allied soldiers came out warily to greet them. In others, Germans held up signs reading “You no shoot, we no shoot.” Over the course of the day, troops exchanged gifts of cigarettes, food, buttons and hats. The Christmas truce also allowed both sides to finally bury their dead comrades, whose bodies had lain for weeks on “no man’s land,” the ground between opposing trenches….

A century later, the truce has been remembered as a testament to the power of hope and humanity in a truly dark hour of history.

Time

Let this be another one of our finest hours. Now is not the time for war. It is the time for a trade truce. It doesn’t mean we never return to the battle for a fair playing field in the world of commerce, but some things trump even the war cries of presidents. America is better than that. That is what makes America great, and will make it great again.

Reprinted with author’s permission from The Great Recession Blog