The European Union is prepared to engage in discussions with the United States regarding the reduction of its 10 percent tariff on cars as part of broader negotiations aimed at averting a transatlantic trade conflict. This willingness was expressed by EU Trade Commissioner Maroš Šefčovič during an event hosted by the American Enterprise Institute in Washington, D.C.
Key Points of Discussion
Šefčovič highlighted the EU's openness to considering a more extensive agreement with Trump that could encompass tech regulatory matters and non-trade-related concerns, such as defense spending by EU member states. Emphasizing the importance of the transatlantic relationship, Šefčovič expressed optimism about potential negotiations.
Trade Tariff Discrepancies
President Trump has frequently criticized the EU's 10 percent tariff on passenger cars, contrasting it with the United States' 2.5 percent tariff. He has threatened retaliatory measures, including imposing reciprocal tariffs and targeting specific sectors like automobiles, semiconductors, and pharmaceuticals. In response, Šefčovič defended the EU's tariff structure, pointing out comparable average rates for industrial goods between the EU and the US.
Trade Deficit Clarification
While Trump has focused on the US trade deficit in goods with the EU, Šefčovič highlighted the US trade surplus in services with the EU. By combining goods and services trade, the deficit narrows significantly, accounting for a smaller percentage of total transatlantic trade than previously portrayed.
Path Forward
Šefčovič indicated a willingness to respond firmly to widespread tariff increases but expressed a desire to avoid such scenarios. He underscored the necessity of maintaining economic stability and predictability for businesses on both sides of the Atlantic. Additionally, discussions with US officials aimed to explore potential areas of agreement and cooperation.
Regulatory Challenges
Šefčovič acknowledged the EU's readiness to engage in discussions on tech-related issues with the US while affirming the EU's commitment to safeguarding its regulations. He highlighted the significance of the EU's regulations, such as the Digital Services Act and the Digital Markets Act, and their non-discriminatory nature.
Global Trade Dynamics
Regarding the World Trade Organization (WTO), Šefčovič stressed the organization's importance while advocating for necessary adjustments to align with contemporary challenges, particularly in digital services. He emphasized the need for collaboration, especially with the US, to address issues arising from non-market economies.