Estonia’s economy will no longer recover as before

“Be it Africa or Latin America, China is everywhere. Much more active than the United States or the European Union,” says Foreign Minister Margus Tsahkna. – Free or at least low-tariff global trade, where for the last 30 years the winner was the one who found the optimal balance between quality and price, is becoming a thing of the past. Largely because of China, which critics say has added a third element to the equation: manipulation of the system through cheap currency and hidden subsidies.”

Two weeks ago, Donald Trump won a clear victory in the US elections and is threatening to impose high tariffs on all trading partners, and on China – up to 60%. While government-backed companies shifted electronics and machinery production en masse to East Asia after the end of the Cold War to take advantage of cheap labor and looser regulations, Western politicians are now paying a political price for it.

Voters in former industrial centers who are tired or on the verge of it are demanding protection – both from foreign manufacturing that has stripped them of social security and from new immigrants willing to work for less and threatening to take the remaining jobs. This situation even reached Germany, which, unlike most Western countries, managed to maintain a high level of industry in the economy and employment.

“The main theme of the German elections will also be immigration and criticism of the government for its lack of economic development,” says Tsahkna, referring to the snap federal elections on February 23, triggered by the collapse of the ruling coalition in Berlin. “There is much more at stake than we can see from Estonia, from the border with Russia,” the minister notes. “The destruction of existing ties will harm all parties.”

Europe’s big problem

We speak to Tsahkna as EU foreign ministers meet for the first time in Brussels since Trump’s election victory. While some Western ambassadors in Washington may appear to be in shock and feeling like they are representatives of some other world, Tsahkna said that at Monday’s Foreign Affairs Council meeting, all participants were clearly aware of the current situation.