EU Awaits Trump Actions on Its Car Tariffs, Exemptions This Week
The European Union is expecting US President Donald Trump to announce executive actions this week to formalize the bloc’s lower tariffs for cars and grant exemptions from levies for some industrial goods such as aviation parts, according to people familiar with the matter.
The two sides are also anticipated to publish a joint statement outlining the political commitments agreed by Trump and European Commission President Ursula von der Leyen last month, said the people, who spoke on condition of anonymity to discuss private deliberations. The legal form the actions would take is up to the US, the people added.
Under the terms agreed with Washington, the 27-nation bloc faces a 15% US tariff on most of its exports. That rate would also apply to cars rather than the current 25% level, as well as to any future sectoral measures targeting pharmaceuticals and semiconductors, officials on both sides have previously said.
An executive order released by the White House last week confirmed that the universal levy would apply to the EU as a ceiling, while most other trading partners will see their baseline rate added on to existing so-called most-favored-nation tariffs.
However, the order only covered so-called reciprocal rates and didn’t spell out any exemptions, nor how Trump’s sectoral measures would apply to trading partners. In addition to a universal levy, the US president has imposed 25% tariffs on cars and car parts and double that rate on steel and aluminum. He has also threatened to target pharmaceuticals and semiconductors in the near future.
Officials expect only a limited number of goods, including some generic medicines and aviation, to be granted a lower rate than the 15% baseline this week. The two sides will continue to negotiate exemptions for other goods such as wine and spirits as well as other items that could benefit from zero-for-zero tariff arrangements, Bloomberg previously reported.
The EU is also pushing for an agreement that would allow a certain volume of steel and aluminum to be exported to the US at a lower rate than the 50% levy currently imposed on the metals. Those negotiations are taking place alongside discussions aimed at protecting supply chains from overcapacity.
Any sign of the US not holding up its side of agreed political commitments would see renewed calls from EU member states to respond, some of the people said. The bloc has prepared countermeasures covering nearly €100 billion ($116 billion) worth of goods that could be deployed automatically if needed.
Source: Bloomberg
