Trump expresses optimism on EU trade deal

In a meeting with Italian Prime Minister Giorgia Meloni, Donald Trump said: ‘There will be a trade deal, 100 per cent’.

President Donald Trump greets Italy's Prime Minister Giorgia Meloni at the White House on Thursday. Picture: AP /Alex Brandon

President Trump said he would have “very little problem” making a deal with the European Union to reduce tariffs in exchange for access to a US market that he said has “something everyone wants.”

“There will be a trade deal, 100 per cent,” Trump said of the EU, adding they “want to make one very much.”

Trump spoke before meeting at the White House on Thursday with Italy’s Prime Minister Giorgia Meloni, who said she would invite Trump to Italy for trade meetings. Meloni wouldn’t say whether retaliatory tariffs from the EU would remain an option if a deal wasn’t reached.

Meloni was intent to make the most of her status as the first European leader to meet Trump in Washington since “Liberation Day.”

“As you can imagine, I feel no pressure at all,” Meloni said, addressing a crowd of entrepreneurs and business leaders Tuesday night in Rome.

President Donald Trump meets with Italy's Prime Minister Giorgia Meloni in the Oval Office. Picture: AP /Alex Brandon

The Italian premier is better placed to convince Trump to go easy on Europe than almost any of her counterparts. Meloni and Trump share a conservative, anti-woke worldview and Trump likes her, once calling her a “fantastic woman.” Meloni, a friend of Elon Musk, was the only European leader to attend the president’s inauguration.

Still, it is a daunting task.

Meloni’s meeting with Trump on Thursday will test whether she can use this ideological affinity to secure a breakthrough for Italy and the EU more broadly. Talks to renegotiate the world’s biggest trade relationship could be long and contentious.

Trump has repeatedly criticised the EU, accusing it of “screwing us on trade.” To appease the president, the 27-country bloc is floating the possibility of bringing mutual tariffs for industrial goods down to zero, an offer Trump has so far rebuffed.

Meloni’s broader goal is to keep the US. firmly anchored to Europe, positioning herself as a potential bridge between Western allies. As the rhetoric from Washington turned increasingly antagonistic, the Italian premier has tried to keep the continent in Trump’s good graces, urging her European colleagues to avoid confrontation.

She has avoided criticising the Trump administration’s rapprochement with Russia despite her staunch support for Ukraine. She has spoken out against plans led by the U.K. and France to potentially send peacekeeping troops to Ukraine without the participation of the US.

In response to pressure from Washington, Italy is signalling it will increase military spending to at least 2 per cent of its budget to meet its obligations under the North Atlantic Treaty Organisation alliance.

“We have made a political decision in response to requests from America, which are legitimate,” Italian Foreign Minister Antonio Tajani said over the weekend. “When the United States says ‘we alone can’t be responsible for Europe’s security,’ they are right.”

Mr Trump meets with Ms Meloni in the Cabinet Room of the White House before luncheon. Picture: AFP

European countries are planning to increase military spending to reduce military dependence on the US after Trump cast doubt on whether America’s longstanding security guarantees will last.

Meloni in Washington is likely to signal that, as far as Italy is concerned, some of that spending could happen in the US, where Italian companies — including defence conglomerate Leonardo and shipbuilder Fincantieri — already have manufacturing sites. Italy is also open to increasing its gas imports from the US, another issue that Trump is pressing Europe on.

In response to Trump’s decision to pause so-called reciprocal tariffs — which include 20 per cent blanket levies on European goods — the EU put on hold a planned set of countermeasures that targeted US goods ranging from soybeans to motorcycles.

Still, a 10 per cent baseline tariff on all imports and 25 per cent sector-specific tariffs on cars, steel and aluminium remain in place. Trump is considering additional global tariffs, including on pharmaceutical products.

The EU has made it clear that retaliatory tariffs are possible. “If negotiations are not satisfactory, our countermeasures will kick in,” said EU chief Ursula von der Leyen, who is closely co-ordinating with Meloni on her trip.

Trump made it clear that dropping tariffs alone isn’t going to cut it. He has been complaining about non-tariff barriers, too, ranging from strict food-safety regulations to value-added taxes on goods and services — issues on which European countries are unlikely to compromise.

Trump wants the bloc to commit to buying large amounts of American energy to reduce the EU’s trade surplus with the US Europe sells more goods to the US than it buys, but the opposite is true when it comes to services.

The EU’s goods trade surplus with the US was $236 billion last year; it was $132 billion with services included for 2023, the last available figure from the Commerce Department. That is something Trump has left out of his tariff calculations but that European officials may use in trade negotiations.

The EU has delayed a decision to fine US tech companies including Apple and Meta under its digital-competition rules. The US has complained that such penalties amount to unofficial taxes on large American tech firms.

Wall Street Journal