European Commission President Ursula von der Leyen was to meet with US President Donald Trump after press time last night to clinch a trade deal for Europe that would likely see a 15 percent baseline tariff on most EU goods, but end months of uncertainty for EU companies.
Trump, in Scotland for a few days of golfing and bilateral meetings, told reporters upon his arrival on Friday evening that von der Leyen was a highly respected leader and he was looking forward to meeting with her on his golf course in Turnberry.
He said there was a 50-50 chance that the US and the 27-member EU could reach a framework trade pact, adding that Brussels wanted to “make a deal very badly.”
Photo: Reuters
The EU faces US tariffs on more than 70 percent of its exports, with 50 percent on steel and aluminum, 25 percent on cars and car parts and a 10 percent levy on most other EU goods. Trump has said he would hike the rate to 30 percent on Friday, a level EU officials said would wipe out whole chunks of transatlantic commerce.
Further tariffs on copper and pharmaceuticals are looming.
A 15 percent tariff on most EU goods would be seen by many in Europe as a poor outcome compared with the initial European ambition of a zero-for-zero tariff deal on all industrial goods.
However, it would be better than 30 percent and it would remove uncertainty about business conditions that has already hit profits of European companies. For Trump a deal with the EU would be the biggest trade agreement, surpassing the US$550 billion accord reached with Japan on Tuesday last week.
Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, has so far reeled in agreements with the UK, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of “90 deals in 90 days.”
The EU deal would be a huge prize, given that the US and EU are each other’s largest trading partners by far and account for a third of global trade.
“We’re cautiously optimistic that there will be a deal reached,” said a Trump administration official, who spoke on the condition of anonymity. “But it’s not over till it’s over.”
In case there is no deal and the US imposes 30 percent tariffs, the EU prepared countertariffs on 93 billion euros (US$109.2 billion) of US goods.
EU diplomats have said a possible deal would likely include a broad 15 percent tariff on EU goods imported into the US, mirroring the US-Japan deal, along with a 50 percent tariff on European steel and aluminum.
It remains unclear if Washington would exempt EU imports from other sectoral tariffs on automobiles, pharmaceuticals and other goods that have already been announced or are pending, although EU officials are hopeful the 15 percent baseline tariff would apply also to cars and pharmaceuticals.
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