[By Observer Net, Xiong Chaoran] Previously, US President Trump had agreed to delay the threat of imposing 50% tariffs on the EU and extended the US-EU trade negotiations until July 9. EU officials now expect that even after the trade negotiations end, the US will maintain some tariffs, while the European Commission has not yet indicated whether this move by the US would trigger countermeasures from the EU.
Bloomberg reported on June 24 local time that if Trump imposes a 10% "base tariff" on EU goods as expected, the EU plans to impose retaliatory tariffs on US imports including Boeing aircraft. "If the US insists on an unequal agreement, including retaining a 10% tariff in the negotiation results, we will need to retaliate and rebalance in some key areas," said Stephane Sejourne, Executive Vice President of the European Commission and Commissioner for Industrial Strategy.
If the EU actually imposes tariff retaliation against the US, the value of the involved goods is about 116 billion euros, including 21 billion euros worth of various US goods previously responding to the US steel and aluminum tariffs, and 95 billion euros worth of goods proposed to respond to the "reciprocal tariffs", including Boeing aircraft, cars, and bourbon whiskey.
On May 23 local time, in Frankfurt, Hesse, Germany, a screen showed a picture of US President Trump. After Trump announced heavy tariffs on EU goods, Germany's main stock index DAX dropped sharply. Visual China
On April 2 local time, Trump announced so-called "reciprocal tariffs," increasing tariffs on EU countries to 20%. A few days later, Trump also announced a 90-day tax deferment for most countries, during which a 10% "base tariff" was retained. On May 23 local time, Trump suddenly posted that he suggested imposing a 50% tariff on the EU from June 1, accusing the EU of being established mainly to take advantage of the US.
Subsequently, after a call with European Commission President von der Leyen, Trump agreed to delay the threat of imposing a 50% tariff on the EU and extended the US-EU trade negotiations to July 9, the expiration date of the 90-day deferral period.
Currently, the EU is urgently trying to reach an agreement with the US before July 9. The EU estimates that the current US tariff threats cover 380 billion euros worth of goods, accounting for about 70% of the EU's exports to the US.
An unnamed EU official said that the negotiations have accelerated, and the European Commission is doing everything possible to reach a solution that is beneficial for both sides.
Bloomberg previously reported that the European Commission told member states last week that the US' persistent demands would lead to an unfair agreement, and the EU would assess the "degree of unfairness" it was willing to accept (if any). In addition, any decision on retaliation would require coordination and agreement from member states.
In the US' demands, including measures related to fish export quotas, EU officials said these measures may not comply with World Trade Organization (WTO) rules, non-reciprocal tariff-related initiatives, and a series of economic security requirements that EU officials called "unrealistic".
On June 23 local time, EU Trade Commissioner Maros Sefcovic said in Berlin: "I understand that the US is very determined to make the 10% (base tariff) its bottom line." He also said: "We are still developing balancing measures in case we cannot reach a fair, negotiated solution. These measures will protect European businesses and workers."
Bloomberg said that the civil aviation industry will be one of the sectors affected by this trade war. Sejourne said that Airbus, based in Toulouse, France, cannot accept Boeing's "unfair competition" because this European aircraft manufacturer faces an additional 10% tariff.
The Financial Times reported on May 28 local time that although the market is optimistic about the progress of US-EU negotiations, senior EU officials privately painted a bleak picture of the negotiations. EU trade negotiators admitted they were unlikely to overturn Trump's "reciprocal tariffs" and warned European governments that to avoid a full-scale trade war, greater concessions would be needed.
Although negotiators hope to reduce tariffs, according to EU officials and diplomats, the European Commission has informed member states that Trump's policy of imposing a 10% "reciprocal tariff" on almost all goods may continue. This assessment marks a significant change in the EU's attitude towards the negotiations. Previously, unlike the UK, the EU refused to make unilateral concessions to limit tariffs to the "base tariff" of 10%.
Three diplomats said that France is the only EU country opposing unilateral concessions and accepting the 10% tariff, while several other member states previously held similar positions. European officials and diplomats said that due to the market failing to constrain Trump's tough trade policies as expected, the EU is facing a dilemma: either compromise and retreat or retaliate in kind.
On May 26 local time, Björn Seibert, chief of staff to von der Leyen, clearly stated that if the negotiations failed, the EU should be prepared to take countermeasures. During the negotiations, the EU suspended the implementation of a 21 billion euro countermeasure plan - imposing up to 50% tariffs on US goods such as corn, wheat, motorcycles, and clothing, which aimed to retaliate against Trump's steel tariffs.
Currently, the European Commission is seeking opinions from member states on another 95 billion euro countermeasure list, covering goods such as Boeing aircraft, cars, and bourbon whiskey, which aim to respond to Trump's "reciprocal tariffs". Some member states advocate a tougher stance, believing this could force Trump to make concessions. An EU diplomat said: "It is politically unacceptable for us to just accept a 10% tariff without taking any measures, and businesses and the public will not accept it."
Recently, after attending the G7 summit and returning, Trump still insisted to reporters that he believes the EU has not provided a "fair agreement". He said: "They either make a good deal or pay whatever we say."
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