Top EU negotiator says higher tariff rates would ‘prohibit’ transatlantic trade
US president Donald Trump’s threatened tariffs of 30 per cent would realistically cut off the European Union’s ability to keep trading with the United States as it has done for years, the union’s top negotiator has said.
The EU is weighing up how to respond to a letter from Mr Trump stating he plans to raise tariffs on goods coming from the EU to 30 per cent on August 1st in a serious setback to hopes of Brussels and Washington agreeing a quick tariff deal.
EU trade commissioner Maros Sefcovic, who has been leading negotiations for the bloc, said blanket tariffs of 30 per cent would practically “prohibit” the future flow of trade from Europe to the US.
“It will be almost impossible to continue trading as we are used to in a transatlantic relationship,” Mr Sefcovic said on Monday.
European businesses have faced 10 per cent tariffs on goods sold into the US since early April, with steel products and cars subject to higher levies.
Commission officials and national diplomats spent the weekend trying to gauge whether the latest move by Mr Trump is a negotiating tactic, or if he seriously intends to triple import duties from August 1st.
Mr Sefcovic said EU and US negotiating teams had been “very close” to a preliminary trade agreement. The outline of that agreement-in-principle would have seen the EU accept the existing 10 per cent tariffs, with exemptions for some sectors.
The threat of 30 per cent US import duties from the start of next month introduced a “totally different dynamic” to discussions, Mr Sefcovic said.
Senior EU negotiators are attempting to get the talks back on track, with Mr Sefcovic to speak on the phone with US commerce secretary Howard Lutnick on Monday evening.
The EU commissioner is expected to express how poorly the letter from Mr Trump has gone down in Europe.
Speaking after a meeting of EU trade ministers in Brussels, Mr Sefcovic said there was “strong” push back in the room to the US move.
“The 30 per cent is absolutely unacceptable, this is the level which is absolutely prohibitive to any trade,” he said.
Mr Sefcovic said the EU would “compare notes” with some of the two dozen countries who received similar letters from Mr Trump, who include Japan, South Korea, Mexico, Canada, Brazil, and several states in south-east Asia. “All the major trading partners of the US got a letter,” he said.
“We want to use every day, every possibility and every minute until the 1st of August to find a negotiated solution,” he said.
The European Commission is readying its own set of tariffs, if negotiations run out of road. The union’s executive arm is expected to reveal details of a second package of retaliatory tariffs the EU would levy on US products, in the event talks fail.
The package will target €72 billion worth of US trade, revised down from €95 billion after national governments lobbied to prevent certain sectors being dragged into the tariff dispute.
Those measures would come on top of a €21 billion package of EU tariffs on US steel, soybeans and other products, which have been paused while talks continue.
“President Trump has said that he wants to conclude a lot of trade agreements, and I think we should take him at his word on that,” said Minister of State for European affairs Thomas Byrne.
Mr Byrne, who attended the trade meeting in Brussels, said there was still time to agree a deal before August 1st.
Exports of Irish butter to the US worth half a billion euros last year, would be put in a “very difficult space” if higher tariffs came into effect, Minister for Agriculture Martin Heydon said. “This is serious for Irish exporters,” he said.
Irishtimes