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Donald Trump’s trade negotiators are pushing the EU to make unilateral tariff reductions on US goods, saying without concessions the bloc will not progress in talks to avoid additional 20 per cent “reciprocal” duties.
US trade representative Jamieson Greer is preparing to tell his EU counterpart Maroš Šefčovič today that a recent “explanatory note” shared by Brussels for the talks falls short of US expectations, according to people briefed on his thinking.
The US is unhappy that the EU only offered mutual tariff reductions rather than pledging to lower duties alone, as some other trade partners have proposed to Washington. It also failed to suggest its proposed digital tax was a point for negotiation, as the US has demanded.
The EU has been pushing for a jointly agreed framework text for the talks but the two sides remain too far apart, according to the people familiar with the discussions.
Greer and Šefčovič are scheduled to meet in Paris next month, which is expected to be a key test of whether the two sides can avoid their trade dispute escalating. The US is determined for Brussels to adopt measures to reduce its €192bn trade deficit in 2024.
The EU-US have started exchanging negotiating documents but they have made little progress on substance since Trump announced a 90-day negotiation period. A third official briefed on the interactions said they were not optimistic about reaching any deal that avoids US levies on European imports.
“Exchanging letters is not real progress,” they said. “We are still not really getting anywhere.”
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The UK agreed a deal that kept Trump’s 10 per cent “reciprocal” tariff rate in place but secured a tariff-free quota for its steel exports and a lower levy of 10 per cent for 100,000 cars. It also had to allow more imports of US ethanol and beef.
The US levied a 20 per cent “reciprocal” rate on most EU goods in April, but halved it until July 8 to allow time for talks. It has retained 25 per cent levels on steel, aluminium and car parts and is promising similar action on pharmaceuticals, semiconductors and other goods.
Some EU diplomats believe that the US will maintain 10 per cent as a baseline in any deal — a prospect many EU trade ministers say would trigger retaliation.
The US views the EU’s existing offer, which would remove all tariffs on industrial goods and some agricultural products if Washington does the same, as ultimately favourable to Brussels because it uses product standards to keep out imports.
The US has sent the EU its standard terms for a deal, which includes making it easier for US companies to invest in the EU, reducing regulation and accepting US food and product standards. It also wants national digital taxes abolished.
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Sabine Weyand, the Commission’s top trade official, told ambassadors on Sunday that it wished to “counter the US’s unilateral demands with co-operative agreements”, according to a person briefed on the EU response.
It has offered to discuss mutual recognition of standards, smoothing procedures for food and animal trade, and how to ensure imports complied with international labour rights and environmental protection standards, a key US demand.
She said that while the Commission was considering further retaliatory measures every effort should be made to avoid them. The bloc has paused tariffs on €23bn of US goods during the talks and is consulting industry and governments on a list of €95bn more, including Boeing aircraft and Bourbon whiskey.
Olof Gill, EU trade spokesman, said: “The priority for the EU is to seek a fair, balanced deal with the US, one that our massive trade and investment relationship deserves.
“Both sides need to work to resolve the current tariffs situation, as well as co-ordinate strategically in key areas of mutual interest.”
