EU's potential €100 (£85) billion tariff threat amid trade standstill
The European Union plans to impose tariffs on American goods worth approximately €100 (£85) billion if it fails to reach a trade agreement with the USA during the ongoing negotiations, according to unofficial Bloomberg reports.
Bloomberg bases its reports on information gathered from individuals familiar with the matter. It explains that on Wednesday, this idea is to be presented to individual member states, and the topic is to be discussed over the next month. Only then will the final list of goods that may be subject to tariffs be known.
It's important to note that this would be a "Plan B" because, for now, the EU is negotiating with the USA over new trade rules after new, severe tariffs on most US trade partners came into effect on 9 April and were suspended the same day for 90 days. President Donald Trump gave the countries this amount of time to potentially develop trade agreements.
Bloomberg reports that this week, the European Commission will try to restart sluggish negotiations that began last month and present the USA with a new offer. "The EU’s proposals are likely to include reducing trade and non-tariff barriers and increasing investments in the US," the agency reports.
It also notes that the EC has already proposed to the United States the elimination of all tariffs on industrial goods, including cars, in an attempt to address one of Trump's main complaints—that the European Union has unfair trade barriers. The United States rejected this proposal. Additionally, the EU also offered to purchase more American goods, including liquefied natural gas and soybeans, which helped ease tensions between the EU and the USA during Trump's first term.
The agency comments that both sides have made little progress in the current negotiations, and it is expected that most American tariffs will remain in place.
25 per cent tariff rate on EU countries
It's worth recalling that on 2 April, Donald Trump announced new tariffs on most of his trading partners. He introduced a basic 10 per cent rate on nearly all imports (which took effect on 5 April) and individual rates on specific countries (which took effect on 9 April). EU countries were subjected to a 25 per cent tariff rate. On 9 April, it was suspended for 90 days, but the 10 per cent tariffs remain in effect.
Earlier, Trump introduced 25 per cent tariffs on imported cars, steel, and aluminium. In response to the latter, the EU imposed tariffs on American products worth $21 (£16) billion but later delayed their implementation by 90 days.
Throughout April, Trump exempted some product groups from tariffs, such as electronics.
