Paul Kirby
European Digital Editor
Bloomberg via Getty Images
Failure to reach the transaction will lead to 30% US tariffs and EU measures targeting US exports
The European Union said it considers trade tariff transactions with the US “at a distance of reach” ahead of the August 1 deadline, when President Donald Trump threatened to impose a 30% tax on EU imports.
Hope was raised after EU diplomats suggested that the US had proposed a broad 15% tariff on most European imports.
A European Commission spokesman refused to speculate on Thursday’s latest talks, but said EU negotiators are working on “power and main” to engage in dealing with European consumers and businesses.
White House spokesman Kush Desai previously said that talks about the deal should be considered “speculation” unless confirmed by the president.
Trump said on Wednesday that he would withdraw the threatened 30% collection of EU imports, “If they agree to open it, [European] American companies to unions.”
US Treasury Secretary Scott Bescent suggested good progress as the EU is making.
The European Central Bank changed its interest rates at 2% on Thursday after a string of interest rate cuts over the past few months, with ECB President Christine Lagarde saying “there is less uncertainty so much that this trade uncertainty is resolved.”
Daniel Roland/AFP
ECB President Christine Lagarde said it was time to end the uncertainty of transatlantic trade
Bernard Arneau, chief executive of French luxury group LVMH, said that a similar agreement with the United States and Japan that reached must be reached in a friendly manner.
“We have dropped out of the US and cannot afford to engage in a trade war with our major markets,” he told the French newspaper Le Figaro.
The EU initially wanted a 10% baseline of US import tariffs, in line with the transaction policy the US agreed with the UK until the US sent a letter threatening a 30% tariff.
So far, the EU has refrained from imposing anti-opposition on the US despite European companies facing a 10% tax on exports, in addition to the average 4.8% obligation that European companies faced before President Trump.
However, if President Trump does not approve the EU agreement, member states have agreed to fight back against a list of measures worth 930 billion euros (£81 billion, $109 billion) worth of US goods that will kick a few days after US tariffs.
“If no previous negotiations have occurred, these measures will automatically take effect on August 7th,” Commission spokesman Olov Gill told reporters.
“The EU is currently focusing on finding out the outcome negotiated with the US,” he said, but emphasized that the “twin track” approach is ready to respond without a trade.
The measures 93 billion euros consist of an initial list of 21 billion euros. This was created in retaliation of the 25% US tariffs imposed last March on European steel and aluminum imports – and a new list of 72 billion euros.
The initial tariffs believed to target imports of Harley-Davidson motorcycles, poultry and jeans have been repeatedly suspended in recent months in the hopes of reaching a deal.
The new 72 billion euros for counter measurements are said to include proposed tariffs on bourbon whiskey, chemicals, cars, aircraft and aircraft parts.
Another option in the EU’s arsenal is what is called the nuclear choice or trade “bazooka,” which imposes restrictions on the strong service sector and intellectual property rights in the United States.
To give its formal name, the Anti-Commander Device (ACI) was created to act as a powerful deterrent two years ago when it resorted to unfair coercion to affect European trade or investment.
At this point, there is little support across the EU for this level of retaliation to appear on the table, but earlier this week French Minister of Industry Mark Ferracci proposed that Europe take a stiffer approach and deploy new tools.
Warning that a 30% tariff will have dramatic consequences for French industry and put some sectors in “fatal danger,” Ferracci said various answers should be deployed if the transaction is not reached by August 1.
