Article originally in the Financial Times. Other articles .
Brussels wants to increase the purchases of US goods by EUR 50 billion to solve the “problem” of business relations, the EU’s main negotiator said, adding that the Union is making “some progress” towards reaching the agreement.
However, EU Commissioner for Trade Trade Maroš Šefčovič indicated in an interview with the Financial Times that if Washington retains 10 % duties on its goods, the EU will not consider this as a fair result of commercial negotiations.
At the beginning of July, strict duties are to be imposed on the EU and several countries, but the Union will try to avoid a full -fledged transatlantic trade war.
We understand each other a little better
The United States and the EU made progress through several rounds of personal and telephone negotiations since President Donald Trump introduced and subsequently suspended 20 % duties to the EU, Šefčovič said. He added that “his ambition” is still to achieve a “balanced and fair” agreement with the White House.
Šefčovič said that a key argument that submits to the American trade representative Jamieson Greer and the trade minister Howard Lutnicko is taking into account US exports to the EU, which would make the total trade deficit with Europe only about € 50 billion.
According to him, this deficit could quickly eliminate agreements on the purchase of more US gas and agricultural products.
“If we consider the problem in a deficit of 50 billion euros, I believe that we can really solve this problem … Very quickly resolved through the purchase of liquefied natural gas, through some agricultural products such as soybeans, or in other areas,” said Šefčovič.
“Very important is that I think we understand each other a little better. We understand what their position is and what they go out. And I think they understand a little better,” he added. “I think we understand a little more in numbers.” He pointed out, however, that it would be “very difficult” to reach an agreement that would “clearly be good and acceptable to Member States and the European Parliament”.
This is unfair
On April 2, Trump introduced at least an additional 10 percent duty to almost all countries, proposed for some business partners additional “reciprocal” duties, including 20 % duties for the EU. Trump later suspended the application of additional “reciprocal” measures and gave the partners 90 days for negotiations.
Šefčovič said that the combined potential duties threatened with the EU are “astronomical numbers. … We clearly announced it to the United States: ‘This is unfair, this is unfair’. When asked whether it would accept a 10 % duty on business negotiations as the lower limit, Sefčovič answered that the EU considered this a “very high level”, suggesting that the Union will not be satisfied with an agreement that would maintain duties at this level.
Since the announcement of a number of duties that have been upset by the world stock markets and hit the dollar and the United States costs, Trump has mitigated some measures and offered exceptions to sectors, such as the automotive industry. “I see that there have been certain, say, adjustments or corrections,” said Šefčovič. “I’m sure I wasn’t the only one who somehow pointed out some potential negative consequences.”
Trump’s “reciprocal” 20 % duties to the EU would be a complement to sector duties of 25 percent for steel, aluminum and EU cars that remain in force. In exchange for partial relief of the EU, it suspended the application of retaliatory duties to US goods worth € 21 billion, including Harley-Davidson, poultry and clothing.
How to sweeten a business agreement
The European Commission is negotiating business measures on behalf of 27 EU Member States. Šefčovič said that all Member States “want us to negotiate”, but are ready to support further retaliation, unless the agreement is taken place.
On Wednesday evening, the Commission privately informed the Ambassadors of the Member States of areas where it could offer the United States incentives, but also about the preparation of a potential new package of tariffs against America. “It will not be easy, but we will work carefully with every Member State to have a vigorous answer that would have unanimous support,” said Šefčovič.
The Slovak veteran in the chair of the Commissioner, who stated that he is in constant contact with negotiators from other countries who are also trying to reach an agreement with Trump, said that the EU is willing to cooperate with America and to address the impact of a sharp increase in Chinese exports. He wants to sweeten the business agreement.
“We believe that together we can really achieve a lot, especially when it comes to excessive steel and aluminum capacities, and we will work in the semiconductors, overcoming dependence on critical raw materials,” he said.
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