EU To Extend Suspension Of Countermeasures To Allow US Talks
The current list of countermeasures would hit about €21 billion ($24.5 billion) of US goods, while the EU has another one ready of about €72 billion.
European Commission chief Ursula von der Leyen said the European Union will extend the suspension of trade countermeasures against the US until Aug. 1 to allow for further talks after Donald Trump threatened a new 30% tariff rate against the bloc.
The countermeasures, which the bloc had adopted in response to tariffs imposed by Trump on steel and aluminum, had been paused to allow for negotiations and were due to snap back into place at midnight on Tuesday.
“At the same time, we will continue to prepare further countermeasures so we are fully prepared,” von der Leyen told reporters in Brussels on Sunday, while reiterating the EU’s preference for a “negotiated solution.”
The current list of countermeasures would hit about €21 billion ($24.5 billion) of US goods, while the EU has another one ready of about €72 billion.
Von der Leyen also said that the EU’s anti-coercion instrument, the bloc’s most powerful trade tool, won’t be used at this point. “The ACI is created for extraordinary situations,” she said. “We are not there yet.”
German Chancellor Friedrich Merz on Sunday evening said 30% tariffs would hit exporters in Europe’s largest economy “to the core” if a negotiated solution in the trade conflict can’t be found.
Merz said he was coordinating closely with other leaders to ensure tariffs of such magnitude don’t come into force. “That requires two things: unity in the European Union and good lines of communication with the American president,” the conservative leader told ARD in an interview.
Trump has sent out letters to various trading partners, tweaking tariff levels proposed in April and inviting them to further talks. In a letter published Saturday, the US president warned the EU it would face a 30% rate from next month if better terms can’t be negotiated.
The EU had sought to conclude a tentative deal with the US to stave off higher tariffs, but Trump’s letter punctured recent optimism in Brussels over the prospects for an 11th-hour agreement. The bloc’s ambassadors were scheduled to meet Sunday to discuss the situation.
An extension of the suspension of countermeasures will need to be approved by member states.
Cars and tariff levels on agriculture have emerged as key sticking points between the EU and the US, Bloomberg reported previously.
The EU is seeking a tariff no higher than 10% on agricultural exports. An offset mechanism that some carmakers had pushed as a way to grant tariff relief to companies in return for investments in the US isn’t under consideration for now, amid worries from the EU that it could shift production across the Atlantic.
The bloc’s negotiators are focusing talks on car tariffs instead, according to people familiar with the matter, who spoke on condition of anonymity to discuss private deliberations.
