A NEW POLE

It sounds incredible but the fact is that the more is the uncertainty in national and foreign policies of the world's first economy, the more are the chances that other economies can establish a multilateral dialogue to determine common interests. Strangely enough, this primarily concerns the global cooperation in upholding and promoting the principles of free trade.

The world community perceives more calmly and sensibly every new statement by the new US President, Donald Trump, about his intentions to reconsider the existing international trade, political and military agreements, bundled with threats to punish someone or force them to sell less and pay more.

According to experts, Trump tries to act the way he used to conduct his business empire, that is putting forward harsh conditions and forcing people to bow him. But he seemingly does not yet understand he is playing at a different level. The heads of states and relevant trade agreements are not focused only on one, even the largest, economy of the world.

No need to bite the hand that feeds

Having relied on his economic advisers, such as the Director of the National Trade Council, Peter Navarro, and the Commerce Secretary Wilbur Ross claiming that the slow growth of the US economy is a result of foreign trade deficit, Trump threatens to impose large customs duties on commodities from countries with huge trade imbalance. For example, for commodities from China - 45%, Mexico - 20%, and the German cars imported from Mexico - 35%, and so on. And it does not really matter that the US is the emitter of the global reserve currency and the negative trade balance is a forced measure to maintain this very international monetary system. The revaluation of the dollar, which reduces the competitiveness of exports, is also linked to dollar’s status as a reserve currency.

In 2016, the total trade deficit of the US was $502 billion (imports = $2.712 trillion, exports $2.20 trillion). And yet this is less than a record $762 billion deficit in 2006.

The new administration decided to increase the import duties. But, at the same time, it violates the rules of the World Trade Organization (WTO), which defines average allowable customs rates at 3-4% only. If Mr. Trump ignores these rules, then, according to Dieter Kempf, President of the Federal Association of the German Industry, "he risks to bite the hand that feeds the US, since no other country follows the WTO rules so strictly to protect own interests".

The "affected" countries, following the same WTO rules, will be able to resort to retaliatory actions including the sanctions such as penalties. For example, the European Union can respond to Washington's decision to limit the import of cars from Europe by raising duties on American microprocessors and computer equipment. The German media believes that this can lead to an unwelcome trade war but, on the other hand, these measures are necessary to demonstrate Trump that his power in fact is limited and his policies ultimately harm the economic interests of his own country.

Mantras about the economic growth

The leaders of the world's leading countries have so far unsuccessfully tried to explain to the new US leadership the dangers of trade protectionism.

The G-20 finance ministers and heads of central banks gathered in Baden-Baden, Germany on 17-18 March were trying to convince their American colleague Steve Mnuchin in the need to emphasize the importance of free trade principles based on certain rules, standards and agreements in a joint communique. But Mnuchin has repeatedly focused on the following principle: (continuously coordinating each statement via telephone communication with Washington) what is good for the American economy is good for global growth as well. "My main focus is on economic growth in the United States," he repeated as a mantra. "I believe that economic growth in the US is good for us and good for other major economies of the world."

As a result, the version proposed by Mnuchin was adopted. The final version of the agreement contains only an abstract and meaningless phrase: "We are working to strengthen the contribution of trade to our economies."

Only a year ago the statement of the financial "twenty" sounded differently: "We will resist all forms of protectionism."

An underestimated joke

Apparently, the German Chancellor’s attempt to discuss interdependence in the modern global economy with the American president was in vain. Angela Merkel took the heads of Siemens, BMW and other major German companies to Washington hoping that the new host of the White House would listen at least to fellow businessmen.

In particular, they had to tell Trump that German companies invested $255 billion in the US economy and created more than 670,000 jobs. Over the past seven years, German automotive companies have quadrupled the production of their cars in the US market. More than half of the German cars made in USA are exported. BMW exports more cars from the US than General Motors and Ford combined. The number of clients of the third-largest mobile operator T-Mobile USA (American subsidiary of Deutsche Telekom) exceeds 70 million. By the way, Deutsche Bank is a creditor of Donald Trump’s businesses ($2.5 billion) according to media reports.

Alas, given the tweets of Trump about Germany's big debts to the US, which followed immediately after the two leaders split, the overseas voyage of the German Chancellor cannot be called successful.

Nevertheless, Mr. Trump still found "something in common" between him and Merkel - during a joint press conference, he said that they both were a victim of wiretapping by the former US administration. Although Mrs. Merkel did not appreciate this "joke" given her reaction.

Road to Brussels

Rejecting the fight against protectionism, the US openly declare that they do not acknowledge the existing norms of international trade and intend to set their own approach to trade relations with all countries of the world. They do not recognize the same norms that help the US stand as they are. For many years, the USA has been the driving force pushing other countries towards free trade. And now the world is confronted with the situation when the United States is trying to block these efforts.

And this is not the worst thing in world politics. With ease and strange persistence, the new American administration leaves all previously reached interstate agreements shaped for decades. The lack of consistency and continuity in international affairs on the part of this global power can provoke global chaos.

Amidst this uncertainty, Angela Merkel seems to be the only one who is entrusted to defend the free world as both the German Chancellor and the head of a country leading the united Europe. Although she rejects this title calling it "grotesque" and "absurd," perhaps the existing situation has encouraged Merkel to participate in the next election. She announced her decision 11 days after Trump's victory in the presidential race.

"Brexit and elections in the United States have defined a new course" for Europe, says von der Läien, German Defense Minister.

"It seemed to us that in the shadow of American guarantees we could always play in our European sandbox. The new US administration has furnished Europeans with a chance finally to close ranks, grow up, and reinforce their geopolitical power and position," said the former German Foreign Minister, Joschka Fischer.

Quite of a sudden the EU turned to be the new pole in world politics, to which countries from all continents are drawn.

According to the Director of the EU-Asia Center, Fraser Cameron, China recognized the EU as a guarantor of the rules of a multilateral system.

After several years of fruitless negotiations, Japan now wants to have an agreement on free trade with the EU as soon as possible. Perhaps, this will happen already at the end of spring. Japanese Prime Minister Shinzo Abe, apparently under the strong impression of his meeting with Trump held in February, said that Japan wants to "become a champion in protecting the open system with Germany."

Despite the government crisis, high-ranking officials of South Korea are arriving in Brussels with proposals for closer cooperation.

The countries of Southeast Asia, including Indonesia and the Philippines, are seeking to accelerate negotiations with the EU on free trade. India, Pakistan, Australia and New Zealand are also ready to deepen ties with the EU. Mexico is strengthening its trade missions in European countries in order to increase trade with the countries of the region.

The negotiations between the EU and Mercosur (the common market of South American countries) on the free trade agreement are resumed. In March, the representatives of the EU and the Community of Latin America and the Caribbean (CELAC) held a summit in Brussels.

Stringent conditions

"Germany and America are bound by common values — democracy, freedom, as well as respect for the rule of law and the dignity of each and every person, regardless of their origin, skin color, creed, gender, sexual orientation, or political views," wrote Angela Merkel in her message to Donald Trump congratulating him on his election as the new president of the United States. Many believe that this greeting was more like the conditions under which Germany is ready to cooperate with the United States.

If this is true, then the leader of one of the largest economies in the world (the third in terms of total production and the first in terms of export volumes) is fairly consistent in its actions. The financial summit in Baden-Baden was a reconnaissance before the battle. The real battle with the destroyer of the established system of free trade will take place in July in Hamburg, where the heads of the world leading states will convene.

There are fewer people who, like Stephen Hadley (National Security Adviser to US President George W. Bush), consider Trump a "learning system". "He does not know much of what you take for granted," Hadley said in Berlin referring to German politicians: "You must tell him about it, he will listen, he will learn."

Meanwhile, the American President is not able to hear even the proposals for protocol handshake during a meeting with his German counterpart.