Donald Trump has called the European Union a “foe” and has threatened to “tariff the hell” out of the 28-country bloc. So where should we put the chances of the U.S. president agreeing a trade deal with Brussels before he has to face reelection next year? In a surprising burst of cheerful optimism, Germany’s economy minister Peter Altmaier places them as high as 50%. He told reporters last week: “There is a mutual interest to avoid an escalation and to seek a reasonable solution.”

In fairness to Altmaier, 50% is only a coin toss. It’s a reasonable enough bet given the capricious nature of Trump (even if you also need to factor in just how tortuous the U.S. and China trade talks have been and the reluctance of EU leaders such as Emmanuel Macron to give any big concessions on cherished markets like agriculture). The EU negotiations began acrimoniously and might still fall apart acrimoniously, but in Trump-world you never can tell.

Indeed, judging by the quietly positive mood among trade experts in Brussels, 50% might be a little on the conservative side. There’s a belief there that Trump will want some kind of deal to deliver to voters in 2020, while the EU side will be eager to defuse transatlantic tensions and ease the pain of a slowing world economy. The EU’s recent signing of trade agreements with Japan and the South American trading bloc Mercosur offers encouragement.

Still, the scope of any deal (should it happen) would probably be limited to the reduction of tariffs on industrial goods and of technical barriers to trade. It wouldn’t be an all-singing, all-dancing free trade agreement.

The idea of cutting tariffs on cars might seem like a big European concession at first glance, considering they’re set currently at 10% in the EU and 2.5% in the U.S. But throw in pickups and trucks, which face a 25% tariff when entering the U.S. versus 10%-22% going into Europe, and you see the mutual interest in an overall cut.

So imagine this deal does actually happen: The signature, the handshake, the photo-op. Would that encourage Trump to bury the trade-war hatchet permanently with regards Europe? It’s unlikely. There’s no indication that the dreaded $25 billion auto trade surplus that Germany enjoys with the U.S. would vanish, for one thing. Uri Dadush of the Brussels-based think tank Bruegel reckons a tariff deal’s overall effect on the two blocs’ industrial output would be near-imperceptible. If voters re-endorse Trump’s “America First” call in 2020, he would have a mandate to renew hostilities.

To deliver a lasting trade peace, both sides would need look at regulation and taxation as well as tariffs. Two obvious areas of tension are the food safety standards that keep America’s chlorine-washed chickens off European dinner plates and the forthcoming French digital tax on tech giants such as Inc., Alphabet Inc. and Facebook Inc.

Altmaier says the French tax – which has infuriated the Trump administration – “shouldn’t” be allowed to impede trade talks. But with the U.S. and EU leaders so divided on core issues such as environmental protection and technology, it will take years to find an agreement beyond an immediate and relatively straightforward tariff deal.

As well as the American election, next year will also bring a final ruling from the European Court of Justice on whether U.S. data-privacy standards are too lax to allow the free flow of user data from Europe. If the ECJ rules against the way things are done now, it will prove that the Trump-Europe divide is about far more than the sticker price of a BMW. It will be much harder to bridge as a result.

To contact the author of this story: Lionel Laurent at

To contact the editor responsible for this story: James Boxell at

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.

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