The EU has negotiated an alternative, but Trump rejected the European zero-tariff proposal.
Concern is growing in Brussels about a possible trade war. Diplomats confirm that the European Union had earlier proposed a reciprocal zero-tariff agreement, which the US rejected. In a last attempt, the EU has put forward a new proposal of a 10 percent tariff reduction, but it seems to make little impression in Washington.
Trump’s threat of the 17 percent tariff is specifically aimed at food and agricultural products from Europe. In several statements, he argues that European subsidies on agricultural exports create unfair competition. It is unclear which products exactly will be affected; according to multiple sources, it concerns a wide range of foodstuffs.
The European Commission is prepared for countermeasures. Brussels is said to have already developed equivalent sanctions on American goods, including industrial and agricultural products. The Commission emphasizes that the goal remains to resolve the conflict through dialogue, but does not rule out retaliatory measures if Washington presses ahead with its plans.
A statement from Commission President Ursula von der Leyen is expected in the European Parliament on Wednesday. Her speech comes shortly before the US deadline expires. Multiple sources report that later that day the European Parliament will adopt a resolution supporting Europe’s position in the trade conflict.
EU officials stress that the European internal market is strong enough to withstand economic pressure from Washington. In several statements, they say the EU is acting “coordinated and united.” However, some EU countries fear that prolonged sanctions could have adverse consequences.
Despite several visits by EU envoys to Washington, it has so far not been possible to reach a binding trade agreement before the July 10 deadline. European negotiators describe the talks as “extremely difficult.” A senior European negotiator said it is “practically impossible” to achieve an agreement in time.
Within the EU, the deadlock is seen as a test of Europe’s ability to form a common trade front. Some government leaders have advocated accepting the US proposal, while others believe the EU is better off waiting for a more favorable moment.
The latter view also refers to negotiations with a group of Asian countries for concluding a comprehensive trade agreement, following earlier new accords with New Zealand and Australia. The EU is also about to make a final decision on ratification of the Mercosur agreement with four South American countries.