Recent news coverage is highlighting the fact that the deal struck between the US and EU on trade apparently isn’t much of one. According to the New Yorker:
In reality, the Europeans gave up little except their prior refusal to negotiate under threat. Juncker’s pledge that the E.U. would import more U.S.-grown soybeans, for instance, formalized something that was likely to happen anyway. After Trump imposed hefty tariffs on Chinese steel and aluminum products, earlier this year, China responded by imposing equally hefty levies on U.S. agricultural exports, including soybeans. That made American soybeans prohibitively expensive for Chinese buyers, and this has had global repercussions. Brazil, traditionally the E.U.’s largest supplier, is now shipping more of its produce to China, encouraging the Europeans to shop elsewhere. “While China concentrates its purchases on Brazil, the rest of the world turns to the U.S.,” Pedro Dejneka, a partner at the Chicago-based MD Commodities, told Bloomberg News last month.
Something similar is going on with natural gas. After the meeting, Trump declared that Europe will start buying “vast amounts” of U.S. liquified natural gas (L.N.G.), which is produced in Texas, Pennsylvania, and other states. At least in the short term, that is unlikely to happen, because Europe has cheaper sources elsewhere, including Norway and Russia. Global gas prices determine where L.N.G. is bought and sold, Ben van Beurden, the chief executive of Royal Dutch Shell, Europe’s biggest energy company, said on Thursday. “Will U.S. L.N.G. reach Europe? Yes, but only if there is an arbitrage opportunity that makes sense,” he argued. Looking years ahead, Norway’s reserves have plateaued, and the Europeans will eventually need alternative suppliers. U.S. producers could well be among them. But, again, such a result may well have occurred without Wednesday’s agreement.
The full story can be found here.