EU unveils trade proposals to thaw US relations amid tariff tension
The European Union plans to present the US 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 people familiar with the matter.
The document will propose reducing trade and non-tariff barriers, increasing European investment in the US, cooperation on global issues such as addressing China's steel surplus and purchasing American goods, liquefied natural gas, and technology, Bloomberg News reports.
In mid-April, the European Union decided to suspend retaliatory EU tariffs on the United States for 90 days. The EU was supposed to respond in this way to the tariffs imposed by Trump on steel and aluminium. Although these tariffs remain in effect, the Union refrained from retaliation to "give negotiations a chance."
Let's recall that EU tariffs cover American goods whose imports in 2024 amounted to over 21 billion euros (17,9 billion pounds)—just a fraction of the value of goods brought from the EU to the US that were to be subject to Trump's tariffs. The EU suspension will remain in effect until 14 July.
Tariffs shook the economy
Tariffs imposed by Donald Trump—much higher than expected—shook markets, disrupted the international trade system, introduced significant uncertainty, and undermined his ratings. Despite this, the US president assures that it is not over yet.
According to an analysis by The Budget Lab at Yale University, the average effective tariff rate for goods imported into the US increased from 2 to 28 per cent, marking 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 radical reduction in imports from China), the ultimate average tariff level will decrease to a still high level of 18 per cent. The analysis predicts that these taxes will bring 2.4 trillion dollars (1.8 trillion pounds) to the budget over 10 years but will increase price levels by almost 3 per cent and GDP per capita by nearly 5,000 dollars (3,800 pounds).
According to Professor Kenneth Reinert, an international trade specialist at George Mason University in Virginia, Trump's tariffs are "extreme" and harmful to both the American and world economy and constitute a significant blow to the post-war international trade system created by the US.
