EU Set to Seal US Tariff Deal as Trump Threatens 25% Auto Levy
Summary
- The EU is set to move toward an agreement to eliminate import tariffs on US goods in response to President Trump’s threat to restore a 25%% auto tariff.
- If a deal is reached, the EU would remove tariffs on US industrial goods and offer preferential treatment for agricultural products and seafood, while the US would impose a 15%% tariff on most EU goods.
- The EU could still reach a deal by the July 4 deadline despite differences between the Parliament, which wants safeguards such as a sunrise clause and sunset clause, and member states concerned about provoking the Trump administration and creating uncertainty for EU companies.
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The European Union is set to agree on May 19 to eliminate import tariffs on US goods, a follow-up step to the trade deal it struck with Washington last year, as it responds to President Donald Trump’s threat to restore a 25% tariff on automobiles.
Under the July agreement between the US and the EU, the bloc would remove import duties on US industrial goods and grant preferential treatment to US agricultural products and seafood. In return, the US agreed to impose a 15% tariff on most EU goods.
Nearly 10 months later, however, the European Parliament and the Council of the European Union, which represents member-state governments, still have not approved the legislation needed to put the tariff cuts into effect. The main sticking point is disagreement over safeguards in case Trump abandons the deal.
Negotiators from the Parliament and the Council plan to hold final talks at 9 p.m. on May 19, or 7 p.m. GMT. EU lawmakers involved in the negotiations said they were confident a deal would be reached late on May 19 or early on May 20.
Lawmakers have pushed for strong protections, including a “sunrise clause” under which tariffs would be lowered only if the US carries out its side of the agreement, legal grounds to suspend the deal if Washington breaches the terms, and a “sunset clause” that would end the EU’s tariff concessions on March 31, 2028.
But member-state governments have been reluctant to include those provisions, citing concerns they could provoke the Trump administration and create uncertainty for European companies.
Trump said he would impose higher tariffs on EU goods, including automobiles, if the bloc failed to carry out its trade commitments by July 4. He had earlier threatened to raise tariffs on imported EU cars to 25% from 15%.
EU lawmakers also halted work on the bill after Trump threatened in January to impose additional tariffs on European allies that did not support his proposal to annex Greenland, and after the US Supreme Court ruled that his international tariff measures were unconstitutional.
If a deal is reached, the EU could meet Trump’s July 4 deadline after a final approval vote in the European Parliament in mid-June.
Kim Jung-a, guest reporter, Hankyung.com, kja@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
