The European Union is preparing for the possibility that it may not be able to come to a “satisfactory agreement” with the United States in ongoing tariff negotiations, European Commission president Ursula von der Leyen has said.
Speaking after an EU summit, Dr von der Leyen said the bloc wanted to cut a deal with the US administration, that would avert steep tariffs US president Donald Trump has threatened to put on European trade after July 9th.
“We are ready for a deal, at the same time, we are preparing for the possibility that no satisfactory agreement is reached,” the German politician said.
EU leaders discussed their response to Mr Trump’s latest proposal on trade after a briefing from the head of the commission.
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Dr von der Leyen told a summit of the 27 EU leaders in Brussels on Thursday evening that she has received the latest US tariff offer, according to officials briefed on the discussion who declined to give any more detail.
Several member states argued against retaliation, with most suggesting that reaching a quick deal with the US is better than holding out for a perfect one
The question dogging the leaders and the commission, which handles trade matters for the bloc, is whether to accept an asymmetrical trade deal with the US or risk escalation by striking back, provoking Mr Trump’s ire.
Several member states argued against retaliation, with most suggesting that reaching a quick deal with the US is better than holding out for a perfect one, even if many of Mr Trump’s tariffs remain in place, according to two people briefed on the discussions.
But there is still division, with Paris categorically rejecting any deal skewed in favor of the US and pushing for a complete removal of tariffs, another official said.
The EU needs to reach an agreement with Mr Trump by July 9th, when tariffs on nearly all of the bloc’s exports to the US increase to 50 per cent. The US president says the EU takes advantage of the US with its goods surplus and perceived barriers to American trade.
“We hope that the discussions with the US continue in an energetic mood in the coming days — the July deadline is coming soon,” Luxembourg prime minister Luc Frieden told reporters on his way into the summit. “I wish the commission good luck.”
During the meeting Dr von der Leyen floated the idea of “redesigning” the institutions that underpin global trade rules, such as the World Trade Organisation, in cooperation with other parts of the world, such as Asia, she said afterwards.
Detailed discussions with the US are taking place on tariffs and non-tariff barriers, as well as on key sectors, strategic purchases and regulatory matters the EU is hoping to address through its simplification agenda, said the people, who spoke on the condition of anonymity.
Trump has introduced 25 per cent tariffs on cars and double that on steel and aluminum
The US is asking the EU to make what the bloc’s officials see as unbalanced and unilateral concessions. Discussions on critical sectors — such as steel and aluminum, automobiles, pharmaceuticals, semiconductors and civilian aircraft — have been particularly difficult.
Officials believe the best-case scenario remains an agreement on principles that would allow the negotiations to continue beyond an early July deadline.
Alongside a 10 per cent universal levy on most goods — which is currently facing a US court challenge — Mr Trump has introduced 25 per cent tariffs on cars and double that on steel and aluminum based on a different executive authority. He is also working to expand tariffs on other sectors, including pharmaceuticals, semiconductors and commercial aircraft.
Many of those duties are expected to stay, regardless of an agreement with the Trump administration, according to the sources. The EU will assess any end-result and at that stage decide what level of asymmetry — if any — it’s willing to accept.
The EU’s industry chief, Stephane Sejourne, told Bloomberg this week that the EU would need to respond to any tariffs — including a baseline 10 per cent levy — with countermeasures. But some EU leaders, including Italy’s Giorgia Meloni have indicated they could live with some levies if it allows for a rapid deal that avoids an escalation in the conflict.
“When we discussed 10 per cent with companies, it isn’t particularly impactful for us,” Ms Meloni told reporters in The Hague on Wednesday. “I think a decision at 10 per cent would enable us, as far as we’re concerned, to keep working on things that we care about.” —Additional reporting Bloomberg
