Europe is bracing itself for a trade war

After Trump’s announcement of punitive tariffs State-mandated silence in China

At the core, however, it’s about much more than just economic retribution. The EU wants to counter Trump’s nationalist policies and position itself as an advocate of open markets. Trade Commissioner Malmström is certain, “The US measures will have a negative impact on transatlantic relations.” The EU will seek a dispute settlement procedure with the WTO as soon as possible. The cause of the problems in the steel and aluminum sectors are “global overcapacities caused by non-market based production”.

That’s what China means. Malmström wants to resolve the dispute in the conversation: “This sole action of the United States will not help.” The EU definitely wants to avoid being caught between the fronts. Because if Chinese steel loses its sales market in the US, more of it will be sold to Europe. Trump’s calculation: The Europeans would then also raise duties. The EU does not want that, but it could come about to protect the European steel industry with more than 300,000 jobs.

Beijing will host the National People’s Congress on Monday, the most important political event of the year. And that should not be disturbed by any means. Eventually, the more than 3,000 delegates will confirm the almighty state and party leader Xi Jinping for another term as President of the People’s Republic, and Prime Minister Li Keqiang will continue for five years. Add to this a well-known constitutional amendment that will cement the power of Xi Jinping. At the request of the Communist Party, the People’s Congress is to decide that the President will not have to leave the country after ten years as before. China is well occupied with itself. People’s Congress on all channels. A crisis, a dispute with the United States? Wrong time. Trump’s punitive tariffs are not an issue, but silence.

The Consultative Conference will be held in Beijing in parallel with the People’s Congress – an advisory body peppered with a number of entrepreneurs, many of whom are billionaires. There will be the first press conference on Friday. Actually, the perfect stage to ask: What do the punitive tariffs mean for the Chinese economy? Are China’s companies adequately prepared? How will the state-owned companies respond that have built up huge overcapacity in steel but also for cement, aluminum or paper? Are retaliation planned? Is there a threat of a trade war between the two largest economies in the world? No answers, because nobody asks these questions. Everything is agreed, every word announcement before set. Not a single journalist from abroad is approached.

State tenders often involve Chinese manufacturers

State-mandated silence in China. Still. The propaganda can be very different too. When Trump threatened punitive tariffs last summer, there was great indignation. In the event of sanctions, Beijing threatened with retaliation. “If the US does not respect the facts and rules of multilateral trade and take measures that harm economic and trade relations, China will not stand idly by, but take appropriate measures to protect China’s legitimate rights and interests,” it said in a statement by the Ministry of Commerce.

It is above all the People’s Republic itself that systematically isolates itself like hardly any other economy. In many industries, foreign companies are only allowed to produce in China if they partner with a local partner, the profits must be shared. State tenders often involve Chinese manufacturers. According to a survey by the OECD Developed Countries (OECD), China is currently 59th out of 62 in terms of openness to foreign direct investment. That means the market is tight. And it could be much more difficult.

What a Chinese reaction might look like, the Global Times had already sketched shortly after Trump’s election victory: “A batch of Boeing orders would be replaced by Airbus, American cars and iPhones would have a hard time in China, and imports of soybeans and corn would be stopped. ” Chinese students in the US? Not allowed anymore. The state and above all the Communist Party have almost unlimited penetration in the People’s Republic. However, China’s bargaining position is not nearly as good as the government’s. In particular, punitive tariffs would hit China’s export industry, which has shipped about 20 percent of its goods to the United States. Mass layoffs and reduced economic growth could be the result – a horror vision for President Xi and his colleagues.

In Europe there is little hope that Trump will give in. Nonetheless, there are likely to be many phone calls over the weekend between Paris, Berlin and Washington. The chances of success are low. Trump writes on Twitter: “If a country (USA) loses billions of dollars in trade with almost every country it does business with, trade wars are good and easy to win.”

Europe’s rules also apply to Internet monopolists

Punishment for Facebook Europe’s rules also apply to Internet monopolists

Facebook has lied to the EU Commission, but the punishment for it seems rather silly. If Facebook was a car driver, one might think that this is just a matter of parking wrong. The group from Silicon Valley has to pay 110 million euros, because he did not tell the truth when he took over the short message service Whatsapp. Of course, 110 million euros are a lot of money from the perspective of a normal person. Compared to the absurd purchase price of 16 billion euros that Facebook paid for Whatsapp, it is little; and that’s why the company pays the penalty rather quickly than being in public criticism.

The EU Commission is thus, albeit unintentionally, the signal to all Internet companies: Lies us happy if you want to expand. Trick if you think it necessary. Will not be so expensive for you, if you fly up. Because Facebook is not just any company, but has almost two billion registered customers: more than any other Internet company in the world, even more than Google, the search, video and data services probably use more people, but usually without logging in there , Facebook has a tremendous power of data, it knows mail addresses and friend lists, likes and dislikes, even the states of mind of its users.

Europe can not be dictated to the rules of the network

This data power has further expanded the company with the purchase of WhatsApp, with a messaging service that is used by now one billion people. Facebook had promised the EU Commission a careful handling of the data. It would not merge the social network and the messaging service, would not automatically create uniform profiles for users who use both; and you could not do that technically. Could you then – and did it two years later too.

EU imposes 110 million euro penalty on Facebook

Those responsible for the social network are said to have made false statements before taking over WhatsApp. The EU Commission wants to set an example with its decision. more …

The procedure corresponds to a pattern that can be observed again and again in companies from the American West Coast. They stretch (or even break) rules and laws – and see how far they get away with it. Maybe nobody says anything. Apple, Amazon and Starbucks have done so with their tricky tax models, their company constructs were once approved in Ireland, sometimes in the Netherlands or Luxembourg – but they were in contravention of EU law. Airbnb has done so and overruled existing rental rules in many European cities. Also the driving service Uber broke again and again right and its drivers against, o-tone of the Uber bosses, “an asshole called taxi” compete, although the German transport laws did not allow this so.

Innovation does not justify an intentional breach of the law

Now it is a good idea to discuss whether some laws in Germany are antiquated and no longer fit into the digital age – such as the requirement that taxi drivers know all the streets of a city by heart (as if there is no navigation system); or the requirement that limousine services return to their garage after each journey before being allowed to accommodate a new passenger (as if there were not enough traffic jams). But this does not justify a deliberate law break.

Europe therefore does well to create a legal framework for the digital world. Because the Internet must not be a space in which a few powerful corporations simply define what works – and what does not. That concerns the tax law: Who trades with data, has much more possibilities to trick with the taxes, than industrial companies, which must physically move goods. And also for monopolies other rules apply in the digital sphere: Whether Internet companies dominate a market, depends not so much on the turnover (the crucial size in the previous antitrust law), but on how much data they control. The new monopolists have a lot of data. So how should the rules be designed for the digital world? It must be prevented that Wildwestmethoden à la Uber make school. On the other hand, the question is worth noting whether some paragraphs created 50 or 100 years ago need to be modernized in order to make better use of the possibilities of digitization.

This differentiated approach represents an opportunity for Europe. The old world can counter the rampant net American-style net capitalism with its model of a new, digital world that is intelligently regulated. In the end, everyone profits from it and not just a few powerful internet companies.