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The US and EU have initiated significant trade discussions to mitigate the impact of Donald Trump’s tariffs, marking a breakthrough in negotiations that previously left the EU trailing behind in talks with the US administration.
Recent exchanges of negotiation documents between the two parties have laid out a range of discussion topics including tariffs, digital trade, and investment opportunities, according to sources familiar with the matter and an EU briefing note obtained by the FT.
Sabine Weyand, the top trade official at the European Commission, advised member state ambassadors to approach the negotiations calmly and resist the urge for quick wins desired by the US. She cautioned that certain US tariffs, particularly in sectors like steel and car manufacturing, are likely to persist.
Despite being criticized by Trump for supposedly taking advantage of the US, the 27-member EU has faced challenges in making progress with US officials compared to other countries like Japan, South Korea, Vietnam, and the UK.
Trump’s trade representative, Jamieson Greer, urged European diplomats to expedite the negotiation process, warning that failure to do so could result in the reinstatement of tariffs. The EU’s reciprocal tariff of 20% has been temporarily reduced until July 8 to facilitate talks.
Maroš Šefčovič, EU trade commissioner, expressed intentions to address the US-EU trade deficit by increasing imports of US gas, weapons, and agricultural products. However, disagreements persist over issues such as VAT, digital regulations, and food standards.
EU trade ministers emphasized that the recent US-UK agreement, which retained 10% tariffs, should not serve as a model for the EU. They warned of potential countermeasures if similar terms were proposed.
The EU has refrained from implementing retaliatory tariffs during negotiations but has proposed a €95 billion package targeting items like Boeing aircraft, cars, and bourbon whiskey.
While the EU remains firm on certain regulations and taxes, it is open to reducing reliance on Chinese imports and imposing tariffs on subsidized Chinese goods.
Weyand’s visit to Washington highlighted the US’s strategy of using trade agreements to reshape supply chains and reduce Chinese influence, as per the EU document.