Even after Trump's reprieved, the EU is still trying to reach a trade agreement with Trump
It is unclear how the European Union will reconcile its desire for a trade agreement that benefits both sides with Washington's demand for large concessions.
After a phone call with European Commission president Ursula von der Leyen on June 1, Trump decided to back away from the imposition of levies against EU imports. This restored a deadline of July 9 to allow negotiations between the U.S.
The European Commission (which oversees EU trade policy) said that the call gave new impetus and momentum to the negotiations which the two Presidents agreed to accelerate.
It was unclear, however, what progress, if any had been made by Trump and von der Leyen towards a negotiated resolution to the trade dispute.
The EU wants a deal that is mutually beneficial. It could be a deal where both sides agree to a zero-tariff policy on industrial goods and the EU buys more soybeans, weapons and liquefied gas while it gradually phases out Russian gas imports.
An EU official stated that the EU could buy more hormone-free meat, just as Britain did with its trade agreement with the U.S. this month.
The European Commission announced on Monday that it would present a strong case for its "zero to zero" tariff offer. This will include a phone call scheduled on Monday between European Commerce Secretary Howard Lutnick and European Trade Commissioner Maros Sfcovic.
A spokesperson for the Commission said: "We think that this is a very good starting point for a successful negotiation, which could result in benefits on both side of the Atlantic."
The EU sees potential for cooperation in areas such as digital technology, such as AI, and steel overcapacity that both sides blame China for.
The EU wants an end to the 25% tariffs on cars and steel, and Trump should drop his "reciprocal tariff", which was initially set at 20% but is now held at 10% for a 90-day break until July.
Fixing Goods Defects
Washington is determined to reduce its goods trade deficit, which amounted to almost 200 billion euro ($228 billion), with the EU. However, it has a significant, but smaller, surplus in trade for services.
It sent a list to Brussels of so-called nontariff barriers that it wanted addressed. These included value added tax, EU standards for food safety and national taxes on digital services.
A source in the industry familiar with the negotiation said that Trump wanted to make a deal quickly with tangible and symbolic gains, but his administration demanded concessions beyond what the EU would be willing or able to accept.
The Commission, for instance, cannot negotiate away taxes, as they are a matter of national competence.
Bernd Lange is the head of the European Parliament’s Trade Committee, and he will be leading a delegation of legislators to Washington, DC this week. He said that the U.S. sees barriers in some areas where there are none.
He said, "It is about our standards and chemicals regulation as well as our digital regulation," before his trip. "These aren't non-tariff obstacles." "This is not on the negotiation table."
He said that the EU would examine specific regulations and see if they were excessive. However, it wouldn't adopt all U.S. Standards, as appeared to be demanded by the White House.
Trump has said that he wants to move manufacturing to the United States, especially for steel, automobiles, mobile phones, and semiconductors.
Irish Agriculture Minister Martin Heydon stated on Monday that the EU is right to push for an agreement that benefits both parties. Trump's frustration at the EU not having "just rolled-over" was almost seen as a compliment towards the EU's position.
"We are an important trading partner for the U.S." We shouldn't simply accept whatever demand the White House makes. He said that we should explain the mutual benefits of trade and negotiate. $1 = 0.8786 Euros (Reporting and editing by Joe Bavier; Additional reporting from Kate Abnett; Jan Strupczewski; Victoria Waldersee)
(source: Reuters)
