AsianFin -- The European Union may make concessions to secure exemptions from tariffs on key sectors amid ongoing trade talks with the United States.
Credit：Xinhua News Agency
The EU indicated it is willing to accept a trade agreement with U.S. that includes a 10% universal tariff on many of its exports but is seeking exemptions for pharmaceuticals, alcohol, semiconductors, and commercial aircraft as part of a trade deal, Bloomberg on Monday cited people familiar with matter. The EU is also reportedly pushing the US for quotas and exemptions to effectively lower Washington’s 25% tariff on automobiles and car parts as well as its 50% tariff on steel and aluminum.
The European Commission, the EU executive arm that handles trade talks, deems the aforementioned potential trade agreement as slightly favoring the US but still something it could agree to, according to the report.
The European commission didn’t respond to the report. The report, if it is accurate, marks a softening tone as a report days earlier said the EU has vowed to retaliate if its trade negotiations fail to remove the baseline reciprocal tariffs imposed by the Trump administration.
The EU plans to hit U.S. imports including Boeing Co. aircraft with retaliatory tariffs if U.S. President Donald Trump sticks to a 10% baseline levy on the bloc’s goods, Bloomberg reported last Wednesday. “We will need to retaliate and rebalance in some key sectors if the US insists on an asymmetrical deal,” the EU’s industry chief, Stephane Sejourne, told the news media outlet, including if the “outcome of the negotiations is that a 10% tariff remains.”
Reports followed sent positive signals about the trade deal. The EU is weighing concession to woo Trump in bid to clinch a speedy trade deal, the Wall Street Journal cited sources on Thursday. The reported concessions include lowering tariffs on a range of U.S. imports, lowering nontariff barriers, more purchase of American products including liquefied natural gas (LNG), cooperation with the U.S. to handle its economic concerns about China.
Many European officials are resigned to the idea that the U.S. sticks to its 10% baseline tariffs and have focused on seeking exemptions as much as possible to mitigate the tariff shock, per the sources. Germany and Italy are reported to be leaders of a group of EU members that are pushing for a quick preliminary trade agreement between the bloc and the U.S. It was said that these countries argue the EU could first strike an agreement with just a few pages, and then update it in detailed follow-up negotiations.
A Bloomberg report on Friday said the EU leaders seemed upbeat on their trade agreement to avoid transatlantic trade war ahead U.S. President Donald Trump’s July 9 deadline of the 90-day pause on his hefty reciprocal tariffs.
European Commission president Ursula von der Leyen was confident a deal could be struck before the deadline, the president told EU leaders at a closed-door meeting Thursday evening, Bloomberg quoted people with knowledge of the meeting. It was said that there was a shift in tone among the leaders during discussion of a new proposal the U.S. shared this week. Many leaders said they were ready to accept some degree of imbalance in a trade deal to avoid an escalation, per the report.
U.S. Commerce Secretary Howard Lutnick also appeared confident in striking a deal with the EU to meet the deadline. The EU had picked up the pace of the negotiations in recent weeks, laying out the groundwork for an accord, Lutnick said in an interview late Thursday. “Europe has done an excellent job, they’re working hard,” Lutnick said. “I’m optimistic — I think we can get a deal now.”
Lutnick believed a deal with the EU to come at the end of the process is reasonable since the bloc is the largest trading partner for U.S., and the two sides have a deep and complex relationship.
