EU aims to thaw trade tensions with bold negotiation offer
The European Union plans to provide the USA next week with a document outlining a package of proposals aimed at initiating trade negotiations with the Trump administration, Bloomberg News reported on Wednesday, citing sources familiar with the matter.
The document will propose reducing trade and non-tariff barriers, increasing European investments in the USA, cooperation on global challenges such as addressing China's steel surplus, and the purchase of American goods, liquefied natural gas, and technology, reported Bloomberg News.
In mid-April, the European Union decided to suspend retaliatory tariffs on the United States for 90 days. The EU intended to respond in this way to tariffs imposed by Trump on steel and aluminum. Although these tariffs remain in effect, the Union has refrained from retaliation to "give negotiations a chance."
It's worth noting that the EU tariffs cover American goods, with imports totaling over 21 billion euros (33 billion Canadian dollars) in 2024 - just a fraction of the value of goods imported from the EU to the USA, which were to be affected by Trump's tariffs. The EU suspension will be in effect until July 14.
Tariffs shook the economy
The tariffs imposed by Donald Trump, which were significantly higher than expected, shook the markets, disrupted the international trade system, introduced substantial uncertainty, and undermined his ratings. Nevertheless, the US president assures that this is not the end of the matter.
According to an analysis by The Budget Lab at Yale University, the average actual tariff rate on goods imported into the USA increased from 2 to 28 percent, reaching the highest level since 1901 and by far the highest among all developed countries. Researchers estimate that due to changes in consumer behaviour (and a drastic reduction in imports from China), the ultimate average tariff level will decrease to a still-high level of 18 percent. The analysis predicts that these taxes will bring the budget 2.4 trillion dollars (3.3 trillion Canadian dollars) over 10 years but will increase price levels by nearly 3 percent and GDP per capita by nearly 5,000 dollars (6,900 Canadian dollars).
According to Prof. Kenneth Reinert, a specialist in international trade from George Mason University in Virginia, Trump's tariffs are "extreme" and harmful to both the American and global economy, representing a significant blow to the post-war international trade system created by the USA.
