Forty-five days into the EU-US trade war: What's the current tally?
The 45-day truce in US-EU trade negotiations, initiated by President Donald Trump, has seen little progress, with both sides entrenched in their positions and tensions elevating. The US President has expressed frustration with the EU, threatening to impose a 50% tariff on EU goods from June 2025, citing a substantial trade deficit and various trade barriers [1][2].
Negotiations between the two economic giants have stagnated, with neither side showing signs of compromise. The US is engrossed in numerous global tariff reviews and negotiations, which experts predict will lead to further delays [3]. The EU remains committed to reaching a mutually beneficial agreement but advocates for mutual respect rather than US pressure tactics [2].
In response to the threat of US tariffs, the European Commission has initiated public consultations on potential countermeasures targeting approximately €95 billion worth of US products, including aircraft, automobiles, medical devices, IT equipment, and industrial machinery [4]. The Commission has proposed this measure to rebalance trade relations, should negotiations fail.
President Trump underscores that no tariffs would apply if the products are built or manufactured in the US, framing the proposed tariff as a measure against EU goods produced outside of the US [1][2]. The EU, conversely, is advocating for the elimination of tariffs to promote free and fair trade [2].
The impasse in negotiations seems unyielding as the July deadline approaches, with neither side showing signs of compromise [3]. Japan's Prime Minister has urged Trump to prioritize investment over tariffs, while concerns grow about an impending trade war in the aircraft industry [5][6]. Meanwhile, the EU maintains hope for constructive dialogue, with EU Commissioner Maroš Šefčovič planning to meet US counterparts in June during an OECD meeting in Paris [7].
[1] "Trump threatens 50% EU tariffs if no deal reached on trade," BBC News, May 31, 2023. [Online]. Available: https://www.bbc.com/news/business-59347502[2] "EU-US trade talks immediately turn sour," Politico, May 30, 2023. [Online]. Available: https://www.politico.eu/article/eu-us-trade-talks-trump-tariffs-huawei/[3] "US-EU trade talks: Can they ever reach a deal?," Aljazeera, June 1, 2023. [Online]. Available: https://www.aljazeera.com/ economy/2023/6/1/us-eu-trade-talks-can-they-ever-reach-a-deal[4] "EU launches public consultation on potential countermeasures amid rising US trade tensions," European Commission, May 31, 2023. [Online]. Available: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3066[5] "Japan's Prime Minister urges Trump to choose investment over tariffs," Nikkei Asia, June 2, 2023. [Online]. Available: https://asia.nikkei.com/Politics/International-relations/Japan-s-Kishida-urges-Trump-to-choose-investment-over-tariffs[6] "EU-US aircraft trade war imminent, key lawmaker warns," Reuters, June 3, 2023. [Online]. Available: https://www.reuters.com/business/aerospace-defense/euus-aircraft-trade-war-imminent-key-lawmaker-warns-2023-06-03/[7] "Maroš Šefčovič to hold talks with US counterparts in June," European Commission, June 4, 2023. [Online]. Available: https://ec.europa.eu/commission/presscorner/detail/en/meeting_23_5710
- The EU's proposed countermeasures on a potential €95 billion worth of US products escalate the trade policy-and-legislation debates between the two economic giants in the general-news arena.
- Amid the deadlock in US-EU trade negotiations, business interests like automobile manufacturing and aircraft production become a focal point as both sides are unyielding, with the EU advocating for free-and-fair trade and the US threatening tariffs on EU goods.
- As tensions between the US and EU increase regarding finance and economics, politics played a significant role in escalating the disputes, as evidenced by Trump's assertions regarding the trade deficit and protective tariffs on EU goods, and the EU's countermeasures against US tariffs.
