CGTN Europe spoke to Karl Falkenberg, former top trade and environment official at the European Commission.
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00:00Talk now to Karl Falkenberg, a former EU Deputy Director General for Trade.
00:05Karl, welcome, good to see you.
00:07Look, you're a seasoned observer, a veteran observer of international trade.
00:11First, your reaction to Liberation Day?
00:18Well, one has to have a lot of fantasy to call this liberalization.
00:23It's a complete breach of a negotiated multilateral trading system
00:29that we have been enjoying for the last 30 years.
00:34And it's going to be very, very disruptive.
00:37So I would call it a disruption date, perhaps, but definitely not liberalization.
00:43Do you think this is it, or is everything negotiable?
00:46I mean, we've got a few days before this kicks in on its hard deadline.
00:52Is this the end of the story?
00:56No, I don't think it's the end of the story.
00:58It's the beginning.
01:02I think what we will see is two things.
01:07Either an effective negotiation taking place,
01:12but that would have to be in the direction of reducing, if not eliminating,
01:18what has just been announced in the White House.
01:22And I consider that to be rather unlikely.
01:25The alternative would be that those countries that are targeted by these increases in tariffs,
01:35by the way, the calculation is a voodoo calculation at best,
01:40but those countries will try to withdraw similar concessions
01:47to rebalance the trade relationship with the United States.
01:53And that could then prove to be the beginning of an effective negotiation.
02:03Well, Leo, I don't want to disturb the dog barking in the background,
02:05but let me ask you about what you call the voodoo calculation.
02:09I mean, the president's supporters might well say that he's right.
02:12Who knows?
02:12The International Committee has obviously fainted in an attack of the vapors today
02:17on news of the tariffs.
02:19But Trump might well on this make America great again.
02:22Who knows?
02:23He might be right.
02:25Well, I was talking about the calculation.
02:29The calculation to take a trade deficit and divide it by total trade for countries
02:38is anything but an indication of tariffs applied by those countries,
02:46which the United States now claim to be reciprocating.
02:51That's why I said the calculation is voodoo calculation.
02:57So many other elements come into play to find out
03:02why a specific relationship is in deficit or in surplus.
03:11Will this in the end pay out for the United States?
03:15I think the vast majority would disagree.
03:18I think economically, it is clear that it will have an inflationary push.
03:24I think the expectation that suddenly the means would be there for the United States
03:30to completely reindustrialize within any reasonable period of time
03:36to counter that inflationary pressure is not very realistic.
03:41And I think it's also not realistic to expect that the countries concerned by
03:45these targeted tariffs would simply sit there
03:49and accept that their trade with the United States is totally disrupted.
03:55Obviously, frantic tariff avoidance diplomacy is now presumably underway.
04:00I wonder how it compares to the trade negotiations
04:05and trade discussions of your time in office.
04:08I think we've had, we've always had discussions with the larger trading partners.
04:16And the history of the trade relation with the US has been,
04:21has always been a difficult relationship.
04:25But at the end, we have found solutions that both sides found useful.
04:36Here, we have a situation where everything that has been negotiated between us
04:41in the last 30, 40 years is kind of rejected as something completely unfair.
04:51And so it is a very, very different type of negotiation, I guess.
04:57It is a very difficult start for a negotiation.
05:02Difficult start for a negotiation.
05:05And I think, I fear that we will see withdrawal of equivalent concessions
05:13before a real negotiation may begin.
05:17Karl, good to see you.
05:18Thank you for that.
05:18Karl Fulkenberg, the former EU Deputy Director General for Trade.
05:23You're welcome.