[Source/Observer Network, Ruan Jiaqi]

Less than two months remain before the so-called "reciprocal tariff" suspension expires on July 9th, yet the transatlantic negotiations remain deadlocked. Unhappy with US demands, the EU has recently submitted a new trade proposal.

On May 21st local time, Bloomberg reported, citing sources familiar with the matter, that in order to push forward trade negotiations with the Trump administration, the EU recently submitted an amended trade proposal to the US side, which includes multiple provisions that align with American interests. Both sides will continue discussing this proposal and plan to hold a political-level meeting early next month.

According to sources familiar with the matter, the new proposal includes clauses related to international labor rights, environmental standards, economic security, gradually eliminating tariffs on non-sensitive agricultural products and industrial goods between both sides to zero, as well as joint investment and strategic procurement cooperation in areas such as energy, artificial intelligence, and digital connectivity.

In addition, the proposal also covers discussions on food and agricultural standards, mutual recognition agreements, public procurement, digital trade, and the rules for determining the origin of goods to safeguard common interests.

This document also lists cooperation areas in what is referred to as the transatlantic "common challenges," such as export controls and investment reviews, addressing overcapacity in steel, pharmaceuticals, automobiles, and semiconductor supply chains, as well as global competition facing the aviation industry and joint markets for critical raw materials.

Sources familiar with the matter also said that the proposal document leaves room for more specific cooperation in procurement and investment. According to US media reports, an EU Commission spokesperson declined to comment on this.

Transatlantic trade situation. Chart by Bloomberg.

On May 16th local time, after weeks of deadlock, the US and the EU finally exchanged negotiation documents covering a wide range of areas from tariffs to digital trade and investment opportunities.

Bloomberg reported that the latest proposal put forward by the EU Commission is a response to the US proposal. Earlier this week, this revised proposal was delivered to Washington officials.

An EU official described the US document to US media as a "list of unrealistic demands." The official did not disclose the具体内容 of the document, but emphasized that Brussels has repeatedly stated that any unilateral demand that jeopardizes EU autonomy in regulatory and tax matters is considered "non-negotiable."

The aforementioned source said that the EU intends to cooperate with the US and seeks to reach a balanced and mutually beneficial agreement. Both sides are still probing each other at present.

He also told US media that EU officials and many member states remain skeptical about whether the Trump administration shares the same goals for negotiations. They have consistently emphasized to the US side that the prosperity of Europe and America is closely linked.

Meanwhile, the EU is already preparing countermeasures in case the negotiations fail to yield satisfactory results. At the beginning of this month, Bloomberg cited sources saying that Brussels had formulated a retaliatory plan, proposing to impose additional tariffs on US exports worth €95 billion (US$108 billion), including Boeing aircraft, cars, and bourbon whiskey among other American products.

Sources familiar with the matter also added that regarding Trump's recent plans to advance tariffs on semiconductors and pharmaceuticals, as well as his threats to take action against films and aircraft parts, several member states have urged the EU to retaliate if the US implements any such tariffs during the negotiation period.

After Trump took office earlier this year, he imposed 25% tariffs on cars, steel, and aluminum from Europe. On April 2nd, Trump announced the "reciprocal tariff" measures, significantly increasing tariffs on all European imports, but reduced the increase to a benchmark tariff of 10% a week later and granted a 90-day negotiation period.

"Politico" noted that the EU was one of the first economies to negotiate with the US, but so far there has been no breakthrough. As the US has successively reached agreements with the UK and China, the EU fears itself being placed last in Trump's priorities.

According to earlier reports by Bloomberg, although the recent agreements reached by the US with the UK and China indicate limited willingness on Trump's part to escalate trade frictions, EU officials believe that neither agreement provides a clear feasible path for future US-EU agreements. In addition, these agreements also suggest that many goods' benchmark tariffs and mixed industry measures may long exist.

The Wall Street Journal noticed on May 15th that several EU country officials were leaking information that transatlantic tariff negotiations are making progress, with the EU seeking to reach a trade agreement with a greater reduction in tariffs than those of the US-UK and US-China agreements.

Some EU officials pointed out that the conditions offered by the US to the UK and China are insufficient to satisfy Europe. The EU learned one thing from the above negotiations, which is not to act hastily.

At present, many EU countries have clearly rejected accepting the 10% benchmark tariff clause similar to the US-UK agreement. Swedish Minister for International Development Cooperation and Trade Benjamin Dusa made a tough statement, saying that if the EU can only obtain conditions equivalent to those of the US-UK agreement, the US can expect EU retaliation.

A Hong Kong media outlet, the South China Morning Post, mentioned recently that Trump's tariff offensive has shaken the confidence of US allies in traditional alliance relationships. Sweden recently expressed its intention to promote the EU's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to offset the impact of US tariff policies. This move has caused concern within the US. On May 14th local time, US congressmen urgently held a hearing to seek countermeasures.

"As the US becomes increasingly self-isolated, Europe faces a good opportunity to open up to investment and trade," Dusa said. "This is crucial for Sweden. If we want to afford healthcare, schools, and social services in Sweden... our exporters must have access to more markets."

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Original source: https://www.toutiao.com/article/7507074638606844443/

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