TMTPOST -- Reports on Thursday signaled the European Union is considering whether to make some concessions to secure a preliminary agreement ahead of U.S. Donald Trump’s July 9 deadline amid internal division.
Credit：Xinhua News Agency
The EU is weighing concession to woo Trump in bid to clinch a speedy trade deal, the Wall Street Journal cited people with knowledge of the matter. 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-upnegotiations.
Some of European officials who intend to move quickly to get a deal are reportedly seeking relief for sectors hit hard by existing tariffs imposed by the Trump administration. One option the EU has sought for dealing individual sectors is a system known as tariff-rate quotas, just like that adopted in the U.S.-Britain agreement. The U.S. will create an annual quota of 100,000 vehicle imports from Britain, and imported cars within the quota will face a 10% tariff, down from 25%, according to the agreement shared by the White House.
EU leaders are set to debate how much they are willing to sacrifice on trade to win over Trump at a meeting in Brussels on Thursday evening, according to the report.
Bloomerg later reported EU leaders discussed their response to the latest U.S. proposal on trade that European Commission president Ursula von der Leyen shared at the aforementioned meeting.
According to the report, the EU appeared divided during their discussion. It noted the sticking point for EU policymakers is whether to accept an asymmetrical trade deal with the US or risk escalation by striking back, triggering Trump’s retaliation. It was said that several member states stood against countermeasures, with most suggesting that reaching a quick deal with the US is better than holding out for a perfect one, even if many of U.S. tariffs remain in place. On their opposite, France rejected any deal skewed in favor of the U.S., and pushed for total rollback of tariffs.
EU leaders have expressed their stance that the bloc is not ruling out tit-for-tat tariffs in case of no desired deal reached. “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 Bloomberg Wednesday, including if the “outcome of the negotiations is that a 10% tariff remains.”
The EU readies retaliatory tariffs as a senior official recently has warned to make a “credible threat” of retaliation in Trump’s trade war is necessary if it wants to get a good deal with the U.S., the Financial Times (FT) reported on Tuesday.
Von der Leyen was prepared to threaten retaliation to extract a better deal since a possible strong response would help convince Trump to cut his tariffs on EU, Bjoer Seibert, von der Leyen’s chief of staff told the EU’s ambassadors following the G7 summit in Canada last week, according to the report.
Seibert was reported to call for the EU ambassadors to support for the planned tariffs on €95 billion worth of U.S. goods, and reveal that the commission was also preparing measures hitting U.S. services, including levies on American tech companies and limiting access to public procurement contracts for American businesses.