Why the French President Has the Best Chance to Temper 'America First'

Greg Ip

The Wall Street Journal

Biography
@greg_ip

April 23, 2018 7:00 a.m. ET

French President Emmanuel Macron and U.S. President Donald Trump are ideological and stylistic opposites. Mr. Macron is a suave globalist who is passionate about global warming, the Syrian civil war and the European Union. Mr. Trump is a brash nationalist contemptuous of global institutions and wary of foreign entanglements.

But Mr. Macron, who arrives in Washington today as Mr. Trump’s first official state visitor, may stand a better chance of drawing Mr. Trump back into the global fold than anyone.

For all their ideological differences, the two have more in common than meets the eye. Both are political newcomers who entered office at the helm of new movements, and their political views are easily adapted to circumstances. And at present, global economic circumstances have aligned their interests. China and Germany boast the world’s largest trade surpluses, and that creates problems for both Mr. Macron and Mr. Trump, though in different ways.

Mr. Macron, elected on a platform to reinvigorate the French economy, has ushered in labor overhauls to allow companies freedom to negotiate work conditions at the local level, cut taxes on profits, wealth and payrolls, and plans to shake up the country’s training and apprenticeship programs. He is currently preoccupied by rotating strikes at the national railway, SNCF, over his plan to end lifetime employment and usher in competition for the service whose costs, the government estimates, exceed its European peers’ by 30%.

But France also suffers from having lost competitive position against Germany in the last 15 years, which can’t be corrected via devaluation since they share the euro. That has fueled massive German trade surpluses and French deficits.

Mr. Macron is also the European Union’s most vocal critic of Chinese trade practices. Alarmed by Chinese takeovers of European technology companies, he led an effort to persuade the European Commission last year to propose screening foreign investment for threats to national security or European technological prowess in research, space, transport, energy and telecommunications.

Germany went along, but Europe’s biggest economy typically pushes for a much softer line on trade disputes because its export-dependent companies worry about retaliation. U.S. officials have groused that Chancellor Angela Merkel would rather lead business delegations to China in search of sales then confront Beijing over its discriminatory investment and trade behavior.

This makes France a natural partner as American officials seek a united front against China. In December, trade officials from the EU, Japan and the U.S. jointly criticized China without naming it in a statement condemning forced technology transfer, subsidies, stated-owned enterprises and local-content requirements. Trump administration officials have invited foreign partners to join its complaint at the World Trade Organization against China for abusing the terms of foreign companies’ technology licenses.

But before Mr. Macron throws his lot in with Mr. Trump, he must figure out whether his American counterpart is open to compromise. French officials, despite sharing some of Mr. Trump’s concerns about Germany and China, want them dealt with through multilateral forums such as the WTO and the Group of 20 countries.

One economist who advises the French government says France suffers from Germany’s trade surplus, but believes the imbalance should be fixed with more German public spending and European fiscal integration rather than the tariffs and quotas that Mr. Trump favors.

That adviser adds that while France is less exposed than Germany to U.S. tariffs on steel and aluminum and perhaps cars, it would nonetheless side with Germany on any resulting trade war for the sake of EU cohesion.

And while French officials are open to Mr. Trump’s complaints about the WTO, they are mystified as to how specifically the U.S. wants it fixed—or whether it wants the WTO to survive at all.

Mr. Macron is a charmer and Mr. Trump likes to be charmed, which should make for a warm week between the two. But charm alone may not be enough to bend Mr. Trump on trade. He will have to be convinced Mr. Macron’s globalist path offers a superior way for him to put America first.

Write to Greg Ip at greg.ip@wsj.com

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