President Donald Trump said Wednesday that he was confident the U.S. would reach a new trade agreement with Europe that would make new tariffs unnecessary.
In an interview with CNBC’s host Joe Kernen, Trump said he had a “great talk” with the European Commission President Ursula von der Leyen at the World Economic Forum in Davos, Switzerland.
“I said, look, if we don’t get something, I’m going to have to take action, and the action will be very high tariffs on their cars and other things that come into our country,” Trump said. “Now, saying that, I don’t want your audience to get nervous. They’re going to make a deal, because they have to. They have to. They have no choice.”
At Davos this year, President Trump has emphasized a message of optimism about the future and confidence in the U.S. economy. He has said the world should look to the U.S. as a model for economic success through focussing on policies that benefit its own citizens and workers.
Trump said that he has turned his attention to trade with Europe now that his administration has succeeded in getting in place both the phase one trade deal with China and the U.S. Mexico Canada Agreement.
“I wanted to wait till I finished China, to be honest with you. I’m– always like to be very transparent. I wanted to wait till I finished China. I didn’t want to go with China and Europe at the same time,” Trump said in the interview.
At a news conference on Wednesday, Trump said he wants to get a trade deal in place with Europe in place before the 2020 presidential election.
Added together, European countries would rank as the second-largest exporter of goods to the U.S. and the largest importer of U.S. goods, according to data from the U.S. Trade Representative. The United States had a $807 billion in goods trade with E.U. countries in 2018, with exports totaling $319 billion and imports at $488 billion. That left a trade deficit of $169 billion in 2018.
That trade deficit has grown by 77.1 percent since 2008.
Germany is by far the biggest European exporter of goods to the U.S., selling $125.9 billion into the U.S. market. It imported just $57.7 billion of U.S. goods. That makes trade with Germany the biggest source of the U.S.’s trade in goods imbalance with Europe.
By contrast, the U.S. imported $60.8 billion of goods from the United Kingdom, the U.S.’s next largest European trading partner, and exported $66.2 billion, meaning the U.S. had a trade surplus with the U.K.
“Europe has been very, very tough to deal with. They’ve taken advantage of our country, the European Union, for many, many years. And I told them, we can’t do it anymore,” Trump said in the CNBC interview.
The United States had a services trade surplus of $59.9 billion with the E.U. in 2018, up 16.4 percent from 2008.