Not a blank cheque: EU agrees to Trump’s tariff if sensitive sectors spared

The European Union has expressed its willingness to work on a trade agreement with the US, under which the bloc will impose a 10 per cent universal tariff on many of its exports. It has greenlit Trump’s tariffs but wants the US to provide tariff concessions on sectors like pharmaceuticals, alcohol, semiconductors and commercial aircraft.

According to a report by Bloomberg, the bloc is also pushing for quotas and exemptions to mitigate the impact of the US’s proposed 25 per cent tariff on cars and car parts, as well as the 50 per cent tariff on steel and aluminium, which Brussels contends would threaten thousands of European jobs.

The development comes as the European Commission, which handles the EU’s trade matters, has only about a week to reach a deal with the US to avoid a whopping 50 per cent tariff rate on all its goods going to the country.

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The commission thinks that although the trade arrangement, which has been agreed upon by member states, is slightly more beneficial to Washington, it would still be a good idea to go ahead with it.

EU and US chart out a plan

Discussions remain ongoing, with the EU’s acceptance of the universal tariff clearly conditional on the United States agreeing to sector-specific concessions.

The bloc’s trade chief, Maros Sefcovic, will travel to Washington this week to move trade talks ahead, sources told the news outlet. People familiar with the developments said that EU would like the US to be upfront about current sectoral tariffs that the US has in place and any upcoming tariff plans by Trump.

While the Trump administration touts the universal tariff as a means to simplify trade and protect American manufacturing, European officials argue that a one-size-fits-all approach risks escalating trade tensions and undermining transatlantic economic ties.

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What measures is the EU taking?

The EU has approved tariffs on €21 billion worth of U.S. goods, ready to be imposed swiftly in response to Trump’s metal tariffs. The measures target politically sensitive American states, including products like soybeans from Louisiana, home to House Speaker Mike Johnson, along with agricultural goods, poultry, and motorcycles.

The bloc has also prepared a list of additional tariffs on €95 billion of American products in response to Trump’s reciprocal levies. These tariffs would be imposed on industrial goods, including Boeing Co. aircraft, US-made cars, and bourbon.