The Financial Times reported on its front page that the EU is rushing to act to ensure the US lowers tariffs on the automotive industry. Washington has asked the EU to take action first, and the details of the hastily reached trade agreement have been outlined.

The EU is currently racing to secure lower tariffs for its cherished automotive industry, after Washington refused to lower its 27.5% car tariff until Brussels enacted legislation to ease tariffs on American goods.

After weeks of negotiations, the US and the EU outlined all the details of the transatlantic trade agreement reached last month in Scotland, which sets the tariff rate for most EU exports at 15%.

EU Trade Commissioner Mariya Gabriel said she hopes to propose legislation by the end of August to lower tariffs on certain American goods. "Starting from August 1st, tariffs on cars and car parts will be reduced to 15%, which helps our automotive industry maintain global competitiveness," she said, adding that the US tariff reductions will be retroactive. The industry is losing hundreds of millions of euros per month due to its heavy reliance on exports to the US.

Germany, the EU's largest economy, has been strongly pushing for the hastily agreed-upon deal reached in Scotland to curb losses in the automotive sector. A US official said Washington will delay lowering car tariffs to ensure the EU "fulfills its obligations." President Donald Trump imposed a 25% tariff on European car exports in March, an increase from the existing 2.5% rate.

The EU secured tariffs far lower than the previously threatened 30%, but this tariff is still three times the average rate before Trump took office. Ongoing debates around the EU agreement show that despite the public enthusiasm for the trade agreement during the Trump administration, many details remain in negotiation.

As a condition for reducing car tariffs to 15%, the EU agreed to eliminate tariffs on all American industrial products, including cars, and grant preferential market access for seafood and agricultural products (including pork, dairy products, and nuts). This requires approval from member states and the European Parliament, which may take some time, so EU officials urged the US to act quickly after the EU Commission proposes the legislation.

The statement confirmed that the agreement will set a 15% ceiling on US tariffs on pharmaceuticals, wood, and chips. The US had threatened higher tariffs on these three areas, which are under national security investigations. The statement also said that the US will apply zero tariffs on aircraft and aircraft parts, non-patented medicines and their ingredients, and "non-essential natural resources" such as softwood.

Although tariffs on European cars will be reduced to 15%, importers of pick-up trucks, which account for a large share of the market, will still pay 25% tariffs. Brussels promised that as part of the agreement, it will not change its internal regulations on car standards, but the statement shows that it has agreed to work toward "mutual recognition" of US standards.

Mercedes-Benz, BMW, and Volkswagen welcomed the EU's swift move to reduce tariffs. The EU also confirmed that it intends to purchase $75 billion worth of American liquefied natural gas, oil, and nuclear energy by 2028. Walmart warned about the impact of tariffs.

Original: www.toutiao.com/article/1841106192526492/

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