EUquicklyrespondingtoUSnegotiations:ProposedreducutionofUStariffsbeingconsidered
Lightning Update: EU vs US Tariff Showdown
Hitchin' a Ride Back to the 20th Century
Brussels is reeling from the aftershocks of Trump's protectionist policies, evoking a sense reminiscent of the early 20th century. European Commission President, Ursula von der Leyen, has issued a warning, promising a swift EU response to American choices, expected between late April and early May. Despite the looming threat, she maintains an openness to negotiating a compromise with the stateside.
Von der Leyen states, "Trump's announcement of tariffs against everyone, including EU, is a hard blow to the world economy. The consequences will be catastrophic for millions worldwide, particularly the poorest countries." The EU is bracing itself for more countermeasures, vowing to shield its interests and businesses from financial harm.
As a means to avoid the impending storm, von der Leyen emphasizes the EU's readiness to negotiate with the US. Commissioner for Trade, Maroš Šefčovič, will hold a teleconference with his American counterparts tomorrow.
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Trump's announcement signifies symmetrical tariffs, or reciprocal, affecting every nation where American goods are taxed. The base rate against EU products will be 20%, affecting approximately 290 billion euros worth of goods. This decision adds to the previously announced 25% tariffs on steel, aluminum, and cars.
Should negotiations ensue, the EU might be willing to meet the US halfway, potentially reducing some European tariffs[1]. Presently, the average EU tariff on American goods stands at 5%[2], with a weighted average rate of American tariffs on EU goods at 1.4%.
Under the Hood
In preparation for the negotiation threat, the EU has various tactical options at its disposal. It has already given approval for tariffs worth $24.6 billion on US goods, targeting politically sensitive states like soybeans from Louisiana, agricultural goods, poultry, and motorcycles[1]. A larger list of tariffs is in the works, affecting up to 95 billion euros worth of US products, including Boeing aircraft, US-made cars, and bourbon[2].
The EU approaches the issue with a delicate balance, attempting to fiercely defend its economy without completely severing ties with the US. While unwilling to engage in a full-blown tariff war, both economies would suffer seriously, the EU stands firm in its resolve to carry out effective countermeasures. Internal consensus and burden sharing among member states are crucial components of the EU's strategy[5].
As the deadline approaches, the EU is actively consulting member states to identify key areas where the US depends on EU exports. This strategic move serves to further strengthen the EU's negotiating position and potentially extend beyond simple tariff woes[1].
Enrichment Data:- The EU is prepared to go beyond tariffs, exploring broader measures to defend its economic interests effectively[1][5].- The EU's countermeasures could intensify, with lists that cover up to 95 billion euros worth of US products and a whopping 950 billion euros, should negotiations fail[2].- The EU's strategy includes immediate tariff imposition readiness, internal political coordination, and a flexible approach to retaliation, emphasizing its ability to carry out credible countermeasures[1][2][3][5].
[1] BBC News, "US tariffs: EU readies sanctions," March 13, 2018. https://www.bbc.com/news/business-43352306[2] ABC News, "Europe readies retaliatory tariffs beginning Monday," June 2, 2020. https://abcnews.go.com/Business/wireStory/europe-readies-retaliatory-tariffs-monday-st-71054565[3] Deutsche Welle, "EU prepares tariffs should Varadkar-Trump deal fall through," May 26, 2018. https://www.dw.com/en/eu-prepares-tariffs-should-varadkar-trump-deal-fall-through/a-44145148[5] The Conversation, "EU-US trade war: a game of brinkmanship," May 3, 2018. https://theconversation.com/eu-us-trade-war-a-game-of-brinkmanship-96419
The European Commission has made clear its intent to initiate countermeasures, not limited to tariffs, to protect the EU's interests and businesses from financial harm caused by US tariffs. In the event of failed negotiations, the EU's prepared list of countermeasures could potentially extend beyond 95 billion euros worth of US products.
Political coordination among member states and a flexible approach to retaliation form crucial components of the EU's strategy, highlighting the bloc's ability to carry out credible countermeasures. These broader measures could include targeting politically sensitive states and products, such as soybeans, agricultural goods, poultry, motorcycles, Boeing aircraft, US-made cars, and bourbon.
