There are many advantages to being the chief executive of the largest European customer of Boeing. One of them is being able to call Donald Trump a liar and face no consequences – as Ryanair’s Michael O’Leary did last week.
“I don’t have any faith or trust in Trump, who has proven himself to be again and again a liar,” he told Politico, the US-owned political news site. It’s possible the US president and his staff are not aware of the comments, but it seems unlikely, given their obsession with social media and Trump’s notoriously thin skin.
Elon Musk – Trump’s erstwhile government efficiency tsar – certainly heard O’Leary last week when he dissed the prospect of installing Musk’s Starlink satellite system on the airline’s planes. O’Leary said that installing antennas would cost the airline up to €215 million a year in extra fuel.
Not so, claimed Musk on X, casting doubt on Ryanair’s ability to calculate additional fuel costs. “I would pay no attention whatsoever to Elon Musk ... He’s an idiot, very wealthy, but he’s still an idiot,” shot back O’Leary.
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Insulting two of the world’s most powerful men is not a bad week’s work for O’Leary, even by his own standards. How did he get away with it? Because he can. Neither Trump nor Musk has any real leverage over him. The opposite is the case.
Trump is doubtlessly aware of just how important Ryanair is to Boeing, which has stumbled in recent years as concerns mounted over the safety of some of its planes. It now lags Airbus, its European rival.
Ryanair says it has invested over $40 billion (€34 billion) in Boeing aircraft over the years, supporting over 30,000 US jobs. The airline has 300 Boeing 737 MAX aircraft on order for delivery over the next decade, assuming Ryanair takes up all its options. There is a firm order for 150 planes and options for 150 more. It takes a lot for Trump to bite his tongue, but that might be enough.
Musk has an equally weak hand. Starlink sees airlines as an important market for its services, and landing Ryanair would be a significant coup. Ryanair says it just can’t see customers paying for wifi on a one-hour flight. It’s possible that O’Leary is just negotiating. If he isn’t, he should probably take a couple of flights with his teenage children. Either way, he holds the stronger cards.
Musk has resorted to asking his X followers whether he should spend more than €30 billion buying Ryanair – an airline he will not be allowed to control.
There is an important read across from all of this for the European Union as it grapples with how best to respond to Trump’s latest threat: punitive tariffs on some members and the UK unless they play ball with his plans to take ownership of Greenland.
Appointing O’Leary as the bloc’s negotiator would be as entertaining as it is unlikely. But that is not the point. What O’Leary has demonstrated to those who have not grasped it already is that in Trump’s zero-sum world, the thing that counts is leverage.
It is clear that Trump believes the ability to impose tariffs on the US’s trading partners gives him enormous leverage. There is little that has happened over the last 12 months, never mind the last 48 hours, to make him think anything different.
In reality, the EU has far more leverage over Trump than it appears to realise or be prepared to use. It negotiated a trade deal with Trump last year – that is now in jeopardy – with one arm tied behind its back.
The trade surplus the US enjoys in services was not on the table, and neither was the EU’s most powerful weapon – the anti-coercion instrument which allows for much more than retaliatory tariffs. It covers import quotas, access to public tenders, the services sector, investment and intellectual property rights.
EU leaders meet on Thursday to discuss how to respond to the latest threat. Some, including France, favour using the anti-coercion bazooka. The Germans say they will go along with what everybody wants. We are equivocating as only we can, with Tánaiste Simon Harris calling for dialogue and cool heads.
Europe’s lack of unity is not surprising. The new sanctions will affect different members in different ways. There are also the risks of things spinning out of control that come with escalation. But if this effectively rules out the use of the EU’s most powerful weapon, the negotiations are over before they start.
It’s worth remembering that what caused Trump to back down the last time was not the EU’s emollient approach. It was the negative reaction of the US bond markets to an impending trade war with its biggest group of lenders – the EU – and what that meant for the solvency of the US government.
It’s time to put the bazooka on the table.
