Brussels postpones enforcing retaliatory measures for half a year to complete the tariff negotiation with Trump
The European Union (EU) and the United States have reached a significant milestone in their trade relationship, with a political agreement establishing a new baseline for transatlantic trade. This deal, which includes a 15% maximum tariff ceiling on most EU exports to the US, has been welcomed as a means to avoid an all-out trade war and provide stability for businesses on both sides.
The agreement, however, is not legally binding yet, with further negotiations expected to finalize details. The European Commission and the US Administration are working together to close an agreement, with the Commission planning to suspend retaliatory tariffs against the United States for six months starting Tuesday.
Key points about the deal include the US and EU agreeing to this ceiling to strengthen their economic ties and provide predictability for businesses. The EU has committed to significant investments in the US and large purchases of American energy, while the EU will work to reduce tariffs and non-tariff barriers on US exports.
However, some European leaders have expressed concerns that the 15% tariff ceiling may harm EU competitiveness. The deal was reached under the pressure of sharply escalating US tariffs but involves ongoing efforts to resolve issues related to trade barriers beyond just tariffs.
US President Biden has issued executive orders related to reciprocal tariffs to address trade deficits and impose or adjust tariffs as needed, reflecting the sensitive and evolving nature of the trade relationship.
The agreement is seen as a roadmap for trade policy between the two blocs and is expected to halt a potential trade war with serious consequences. The EU Trade Commissioner, Maros Sefcovic, referred to the agreement as the "best agreement" achieved in difficult circumstances.
Pending a concrete agreement on certain sectors, such as wine and spirits, the EU understands that they will be subject to a 15% tariff. The EU Trade Spokesman, Olof Gill, stated that the EU continues to work with the United States to finalize a joint statement.
This development comes as the EU had prepared retaliatory tariffs on US imports worth 93 billion euros, to be implemented in three phases. The first phase of EU retaliatory tariffs was scheduled for August 7, but these will now be suspended for six months.
In conclusion, the EU-US trade agreement is a major step forward with a political agreement setting a 15% tariff cap on EU products entering the US. Yet, it remains pending full legal and technical finalization, with continued talks expected around various tariff and non-tariff trade barriers.
- The European Commission, in collaboration with the US Administration, is working on finalizing the details of the EU-US trade agreement, which aims to establish a 15% tariff ceiling on most EU exports to the US, while also addressing issues related to trade policy, policy-and-legislation, and politics.
- The EU Trade Commissioner, Maros Sefcovic, has referred to the EU-US trade agreement as the "best agreement" achieved in difficult circumstances, highlighting its significance in the general-news landscape, as it provides a roadmap for future trade policy between the two blocs and helps to avert a potential trade war with serious consequences.
