Near the reach of a trade agreement, there are also 15% of European imports for European imports, similar to that signed by Japan.
As stated in, the Commission could accept the so -called “mutual duties” to avoid the US president’s threat from increasing them to 30% from August 1st. “,” Said a European diplomat. “Most Member States keep their breath and may accept this agreement.”
The first information on the agreement
Both sides will lift duties to some products, including aircraft, alcoholic beverages and medical appliances. Indeed, the European Commission, which is responsible for EU commercial policy, briefed the representatives of the member states on Wednesday, following talks with its US counterparts.
The news of the forthcoming agreement strengthened the euro, which covered its initial losses and has been steadily negotiated against the dollar, while US shares recorded further profits, with the S&P 500 reinforced by 0.6%.
EU exporters have been paying 10% additional duties for the products they send to the US from April, while negotiations between Washington and Brussels continue. These duties are added to pre -existing average duties of 4.8%. The minimum 15% duty will include these already applicable duties, which makes Brussels consider that the agreement is merely consolidating the existing regime. Duties in cars, which are 27.5%today, will be reduced to 15%.
The US -Japan agreement has prompted Brussels to accept the highest mutual duty to avoid a devastating trade war. However, the EU could retaliate whether Trump was trying to push further or implemented his threat to increase duties to 30% from August.
This could include the activation of the Anti-Coercion Instrument (ACI) tool, the power weapon of the EU. This tool, which has never been used, would enable Brussels to exclude US companies from public competitions, and reduce imports and exports.
What is Anti-Coercion Instrument-ACI
It is worth noting that the ACI tool is the most powerful EU’s commercial tool and an increasing number of Member States is pushing for its use if no agreement is reached. The medium is mainly designed as a deterrent and is currently not on the negotiating table, and its activation requires a special majority of the Member States to support the traffic. The ACI would allow the EU to launch a wide range of retaliation, including new taxes on US technological giants, targeted restrictions on US investment and restriction of EU market access.
“We are now approaching the decisive phase of the US conflict over duty. We need a fair, credible agreement with low duties, “German Chancellor Friedrich Mertz told reporters in Berlin on Tuesday after meeting with Czech Prime Minister Petr Fyland. “Without such an agreement, we are in danger of economic uncertainty at a time when we need the opposite.”
The EU is continuing to prepare a potential retaliation package of 93 billion euros, with duties of up to 30%, if there is no agreement by August 1, the same sources added. A US official told the FT that the situation remains fluid and may change.
