EU races to find deal compromise as Trump tariff deadline looms
Trade turmoil
This week should decide whether the EU hits a July 4 deadline to implement its trade deal with Washington, after US President Donald Trump’s threat to raise tariffs if the bloc fails to comply, writes Andy Bounds.
Context: Parliamentarians and member states are under pressure to strike a compromise on lowering EU tariffs on US goods after weeks of negotiations. Trump warned this month that he would hit the EU with “much higher” tariffs if Brussels failed to implement its side of last summer’s agreement before July 4.
The European parliament’s biggest group, the centre-right European People’s Party, is pushing for a quick deal at a meeting in Strasbourg tomorrow. Any agreement must be reached before parliament’s plenary session on June 15-18 in order to hit Trump’s deadline.
Željana Zovko, the party’s lead negotiator, told the FT she had grown more confident over the weekend that other groups would also compromise to get a solution.
Zovko criticised the Socialists, the second-biggest group, for attaching extra conditions in an attempt to show they are standing up to Trump.
MEPs, including those from the EPP, voted for additional safeguard clauses to the deal agreed last August.
Under the agreement, Brussels would lower duties on American industrial goods and some agricultural products to zero, while Washington would reduce its so-called “reciprocal” tariffs to 15 per cent on most EU exports.
Since then, however, Trump has imposed additional tariffs on some products containing metal, such as motorbikes and washing machines, while repeatedly threatening further increases.
MEPs have voted to make some EU tariffs cuts conditional on the US reversing those increases, and to introduce an expiry clause in 2028.
Trump has now threatened to raise auto tariffs to 25 per cent if there is no deal by July 4.
Zovko accused leftwing groups, which are sticking to the parliament position, of damaging the European economy just to have a fight with Trump. “We need to get realistic. Our businesses need stability,” she said.
She said she was a “cautious optimist” they would come round after the European Commission drafted a compromise proposal that allows the EU to respond in kind if the US goes back on its deal.
Bernd Lange, the Socialist who is the parliament’s lead negotiator, said he was confident of securing a deal tomorrow in a meeting with member state representatives.