Bloomberg Audio Studios, podcasts, radio news. Right, let's bring in then our conversation and turn our attention to Anthony Gardner, who joins US now, who served as US Ambassador to the EU between twenty fourteen and twenty seventeen under President Obama. Ambassador, good morning, and thank you so much for joining us. You are currently a senior advisor at Brunswick Group. I know that you've hopped straight from Bloomberg Television to Bloomberg Radio,
so I really appreciate it. I could not listen in to TV, so perhaps I'll be asking you some of the same sorts of questions, but I know that our audio audience would really like to understand from you in your role as you had it. How you see the situation now with Donald Trump in the White House saying that US harris will definitely be imposed on the EU? Is that your expectation. We've seen a flip flop on Canada, Mexico, Columbia, but taris imposed on China. Where does the EU stand in this?
Well, it's great to be on the program. I suspect that, yes, he will impose tariffs on the European Union because he bears a special animus against the European Union. He's described them as worse than China, but smaller. He's particularly unhappy with the German trade surplus, and in a lot of the countries that great trade surplus, and so we all
know he believes trade surpluses are evidence of cheating. So I think he is going to impose tariffs on the EU, and I think it's a very sad mistake because when I was in office, and by the way, during many Republic administrations, the focus was on reducing trade bearers and not creating more of them. This time, the European Union is more prepared than it was last time. It's got lists of retaliation that it can put into place pretty quickly, a trade tool kit as they call it, as much
stronger than it was in the first term. He will want to negotiate. It will negotiate that it did in the first term. But we'll try to promise and assuage Trump by buying more American goods, including like last time, soybeans and LNG, probably throwing a bit of defense and weaponry, but that probably will not be enough. It will try to say, did Donald Trump, look, we're doing more on trade, which sorry, on defense, which is what you wanted us
to do. Look at the statistics. We can work more together on a positive extend on China, on export controls, on supply chain resilience, and writing the world trading rules and standardization organizations. None of that, I think is going to be enough for Donald Trump. So I suspect we will see tariffs which are going to have a very negative effect on many, not only exporters, but on manufacturers.
President Trump has characteristically been highly vociferous in his criticisms of that try deficit with the EU from your US right if as someone who was very closely involved in transatlantic trade negotiations during your term, are any of his complaints about the trade relationship between the two two blocks warranted?
Well, in some instances, the EU has tariffs hired in the United States. But look what he doesn't say. It was pretty obvious in the United States is tariffs and someone seas is higher than the ones the EU places. Yes, it is true that the EU's agricultural market is relatively closed. But you know what he doesn't mention, which is also obvious. There are many parts of our economy the United States,
which are pretty close too. I'm picking public procurements and by American and buy America, maritime trade, coastal trade, which is the Jones Act. There are many other areas which this administration ever mentioned. It is false to say the EU is a completely closed market. It's still relatively open on public procurement. I would argue it's more open than the United States. So, you know, we can go back and forth on a ping pong you know, discussion of
who's more open and who's not. But what's fundamentally false is to say they want to country runs a trade surplus with another country, that means it is cheating. It's just not the case. There are many other reasons why the United States runs a massive trade deficit with almost the entire world, and it has nothing to do with
who is cheating and who isn't. So my view is we should be putting more efforts into addressing specific you know, arguments about you know, certain tariffs, making trade liberalized, and not just on tariffs. By the way, there are a lot of things that we can be working on to
facilitate trade transatlantically with our best partner. And by the way, one of the things that trade does that Trump doesn't like, and here I would agree is in some instances countries are not respecting high degree of protection, whether it's on labor or well under the deministration, was the environment and IP those are the kind of restrictions that we should be tearing down to ensure that the level you know that there's a level play field.
HM. But reasoned arguments have not particularly worked. What has worked is caving to a very transactional relationship. If you look at the you know, the phone call between Shinebaum and Trump or between Canada and the US. That is what has actually worked. What would be the most effective pain point for Europe to target Trump with if it wants their message to be heard.
Well, services trade. You know, the US runs a surplus with Europe on services. It runs a deficit on goods trade, but services is the opposite. So no doubt the EU is looking at services trade. If it really really wanted to get tough, they could do something on procurement because this is a massive market in Europe and is relatively
more open. And I think the the United States could say, look, if Americans, the US companies want to participate in the massive procurement market EU, you have to drop tariff that gets pretty that gets pretty tough and aggressive. I think they want to avoid that, but it's there.
And let's assume for a moment then that the tariffs do get imposed in some form or other on a you goods A lot of them are you know, the goods the EU exports the US are extremely popular. I'm thinking here particularly say cars, What impact do you expect that they would actually have? Will consumers US consumers stop buying your pin cars?
Well, you know, the picture there is extremely complex, as you know and your listeners know, because a lot of europe manufacturers actually manufactured cars in the United States. So it depends on the manufacturing question. Some are more exposed partly there, importing both cars and car parts from Mexico and Canada and so forth, so they may get impacted more.
Some European manufacturers do in DBA export cars from Europe the United States, but more and more many of them have been making significant number of cars in the United States. So yes, there will be a shift to probably more production in the United States if you manufacturers have made those announcements recently. But that doesn't mean that you know, tariffs could be These are great things. More jobs in that state because over the longer term, it makes us
less competitive and it will make prices rise. You know, taxes that sorry tariffs are a regressive tax, a tax that's the least well off pay more in general. So it'll be interesting to see when people actually feel this in their pocket book. It may not be immediate, but it will happen.
In terms of the UK, do you think that Britain is really going to be excluded or is it a matter of time? Is it something that comes in perhaps further down the line when the US looks at this. I mean that the government at the moment is trying to focus on the advantages of being both close to the EU and the US. Is obviously an argument that the UK could end up isolated by these massive kind of partners trading blocks.
What's your view on the UK now, Well, yeah, I don't agree with that argument. You know, there was a lot of comfort that the UK had for being inside a big tent. And it's not only because the EU is an effective trade negotiator. It can get much more leverage in the trade negotiations. Look, we saw it recently with Amercrosore. We started recently with the EU's updated agreement with Mexico, the ease negotiating a lot of other agreements across the world. Yes, the UK is doing it as well,
but the EU drives a much much better bargain. Being inside that tent, it gave the UK a certain amount, a certain number of significant benefits. So the UK is now out. So yes, it's trying to do the splits, striving a little bit of each. I suspect the US whether Trump will say to the UK, make a choice either with US or against US. And by the way, that means not aligning with any of the E regulations, but aligning with US regulations on a number of issues,
including on food, on agrifood. That's going to be a really difficult moment for the UK because then it will bear a significant price in terms of goods experts to its biggest market, which is the EU market. So the answer to your question is, this is a really tough line to walk, and it's not without a price.
And on that then on on the UK again, let's let's let's assume that that the premise doesn't manage to walk that that very tough line, and that some form of tariffs are slapped on UK goods. What are the potential sort of pinch points for the UK line to be Where where might the Trump administration target and similarly, what sort of retaliatory measures might we anticipate.
Gosh, I don't want to speculate on that. I mean, we saw already last time, you know, tariffs. I think it was on some drinks trade and so on. But I don't want to speculut which things are going to be selected by the Trump nor what kind of retaliation there will be, So I will I will respectfully pass on that question. I hope we can avoid it because it is, as I mentioned, I think it's a destructive to a causeitive trading relationship.
Ambassador, just briefly, and lastly, do you think that the role of US ambassadors is changing? Obviously, you know it was a job that you held and clearly enjoyed for a long time. Do you think that the role of US ambassadors will change onto the second Trump administration?
Oh, that's a very sad question. Look, the role of ambassadors has been evolving, not just under Trump, by the way, It's been kind of a bipartisan issue for a long time. We are sending, unfortunately too often abroad envoys who know very very little and are there just because they gave money, contributed to campaigns or to the inauguration so forth. This
is a very very negative trend. You know, in some cases it doesn't matter because the relationship with a particular country is so strong that you can you with it
with professionals from the home base s iety Washington. But in some cases where things get heated, and obviously we're about to hit that kind of a situation very soon with Europe and potentially with the UK, you do need envoys who actually know what they're talking about, and who can have be the eyes and ears and be the intelligent set of eyes and ears beyond what Washington can already gather