EU Moves to Revive Fractured Trade Talks With Trump
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The European Union has shared a revised trade proposal with the U.S., as it aims to inject momentum in talks with President Donald Trump’s administration amid lingering skepticism that a transatlantic deal can be reached.
The new paper includes proposals that take into account U.S. interests, including international labor rights, environmental standards, economic security and gradually reducing tariffs to zero on both sides for non-sensitive agricultural products as well as industrial goods, according to people familiar with the matter.
Sent to officials in Washington earlier this week, the paper also outlines mutual investments and strategic procurement in energy, artificial intelligence and digital connectivity, said the people, who spoke on condition of anonymity to discuss private deliberations.
A spokesperson for the European Commission declined to comment.
The EU is aiming to cooperate with the U.S., and is seeking a balanced and mutually beneficial deal, the people said. The sides are still scoping each other out, and the commission would likely need a mandate from member states before starting formal negotiations, one of the people said.
RELATED:Trump Dismisses Last-Gasp EU Push to Stop Tariffs Kicking In
EU officials and many member states remain skeptical that the Trump administration is driven by similar goals and have been stressing to counterparts that prosperity on both sides of the Atlantic is deeply intertwined, the people added.
At the same time, the EU is moving forward with preparing countermeasures if negotiations fail to produce a satisfactory outcome.
EU Retaliation
The 27-nation bloc has put together plans to hit €95 billion ($108 billion) of U.S. exports with additional tariffs in response to Trump’s “reciprocal” levies and 25% tariffs on cars and some parts.
The EU agreed earlier this month to delay for 90 days the implementation of a separate set of retaliatory tariffs against the U.S. over 25% duties Trump imposed on the bloc’s steel and aluminum exports. That move came after Trump lowered his so-called reciprocal rate on most EU exports to 10% from 20% for the same amount of time.
Trump has also said he will press ahead with plans to target semiconductors and pharmaceutical imports, and has threatened action on movies and aircraft parts. Several EU member states have urged the bloc to retaliate should any of those levies be introduced while the two sides are negotiating, the people said.
The European Commission’s latest proposals come in response to a paper the Trump administration shared with the bloc’s executive arm following an earlier EU proposal.
(Bloomberg)
One EU official described the U.S. paper as a wish list of unrealistic demands. Brussels has declared as non-negotiable any unilateral demands that jeopardize the EU’s autonomy in regulatory and tax matters, the official said.
The U.S. has long complained about many EU digital rules and sees its value-added tax as a barrier to trade. Brussels argues that VAT isn’t a trade measure and equally applies to all goods, European and non-European.
Although recent deals the U.S. reached with the U.K. and China suggest Trump’s appetite to escalate has its limits, EU officials don’t see in either agreement a clear landing zone for future deals, Bloomberg previously reported. The two deals also suggest that a baseline tariff across many goods and a mix of sectoral measures are likely to stay.
Other areas covered in the EU’s latest proposal include food and agri-standards, mutual recognition agreements, public procurement, digital trade and discussions on the rules of origin of goods in order to safeguard mutual interests.
The paper also contains areas for cooperation on shared challenges, such as export controls and investment screenings, combating overcapacity in steel, pharmaceutical, automotive and semiconductor supply chains, as well as global competition faced by the civilian aircraft industry and a joint market for critical raw materials.
The document provides space for more specific announcements on procurement and investments, said the people. The two sides will continue to discuss the proposals on an ongoing basis, and are aiming to meet at a political level early next month, the people added.
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