EU readies for US trade fight over tariffs

The EU thought it was on the verge of a deal with the US to keep tariffs in check. Now it is readying a counter-attack.

Cars of different brands destined for import or export stand at Germany’s Bremerhaven port in front of the automotive carrier ship Tannhauser in April. Picture: Getty Images

The EU thought it was on the verge of a deal with the US to keep tariffs in check. Now it is readying a counter-attack.

US officials told the EU’s trade chief that they expect President Donald Trump to demand further concessions from the bloc to get an agreement, including a baseline tariff on most European goods that could be in the range of 15 per cent or higher, sources said.

That was an unwelcome surprise for the EU, which had been working toward an agreement that would keep baseline tariffs at 10 per cent, already a tough concession for some of its 27 countries.

The shift prompted Germany, Europe’s biggest economy and its largest exporter, which had previously been more dovish on US retaliation, to swing closer to France’s more confrontational position, sources said.

Now, EU member states are pressing the bloc’s executive body to prepare new and potent measures to hit back against US companies, beyond retaliatory tariffs on goods, if a deal can’t be reached by the August 1 deadline set by Mr Trump, they said.

“All options are on the table,” a German official said. The official said there was still time to negotiate a deal but added, “If they want war, they will get war”.

The push to increase potential countermeasures marks a turning point for the EU after months of negotiations to salvage the world’s biggest trading relationship. More than $US5bn ($7.7bn) of goods and services moves between the two economies every day.

The European Commission, which is in charge of the bloc’s trade policy, said it wants a negotiated, mutually beneficial agreement and remains deeply engaged in negotiations.

If no satisfactory outcome is found, all options remain on the table, a spokesman said.

On Sunday, US Commerce Secretary Howard Lutnick expressed optimism about reaching an agreement with the EU.

“I am confident we’ll get a deal done,” he said on CBS’s Face the Nation. “And it will be great for America, because the President has the back of America.”

The Wall Street Journal