US-EU trade accord faces delays amid new US tariffs
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On Monday, European Union ministers plan to press senior US trade officials to implement further aspects of the July EU-US trade agreement.
Specifically, they will advocate for the US to reduce tariffs on EU steel and eliminate duties on European products like wine and spirits.
US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer are scheduled to meet with EU trade ministers in Brussels.
This trip marks their first visit to the city since assuming their respective offices.
Trade talk agenda
EU ministers are scheduled to convene to address significant global trade challenges.
A key focus will be on the restrictions imposed by China concerning the export of rare earth minerals and microchips, which have broad implications for various industries, according to a Reuters report.
Additionally, the ministers plan to host Lutnick and Greer for a 90-minute working lunch, utilising this time to discuss matters of mutual economic interest.
The agreement reached toward the end of July marked a significant de-escalation in trade tensions between the US and the European Union.
Central to this deal, the US implemented a 15% tariff on a broad range of goods imported from the EU.
Simultaneously, and as a reciprocal measure, the European Union committed to eliminating many of its existing duties that had been levied against imports originating from the US.
This bilateral concession was intended to foster smoother trade relations and mitigate the economic impact of the previous protectionist measures that had characterised the trading relationship.
Ratification delays and EU priorities
However, the full implementation and formalisation of this agreement face substantial delays.
The necessary ratification process is complex, requiring the official approval of both the European Parliament and the governments of all 27 EU member states.
According to diplomatic sources within the EU, this bureaucratic timeline suggests that the deal may not be formally adopted until March or even April of the following year.
This extended period for ratification has reportedly caused considerable frustration and impatience in Washington.
While the 27-nation bloc is firm in its stance that the procedural path to ratification remains firmly on course, it has simultaneously begun to press for progress on additional, agreed-upon areas of contention.
Chief among these priorities for the EU is the unresolved matter of US tariffs on steel and aluminium imports.
The EU is leveraging the current agreement’s approval process to push Washington to address these specific duties, viewing their resolution as essential for a comprehensive restoration of normal trade relations.
New tariffs threaten the agreement
This indicates that despite the current agreement, significant hurdles and sensitive issues, particularly regarding key industrial sectors, remain central to the ongoing trade dialogue.
The July accord is being undermined by recent actions from the United States, according to EU diplomats.
These actions include a 50% tariff on metals, which has been extended since mid-August to include the metal content in 407 “derivative” products like refrigerators and motorcycles, with the possibility of more derivatives being added next month.
Furthermore, the prospect of new US tariffs on critical minerals, trucks, wind turbines, and planes also contributes to the threat of hollowing out the agreement.
The EU bloc is seeking to have a wider array of its goods—such as wine, spirits, olives, and pasta—subjected only to the lower tariffs that existed before the Trump administration.
Furthermore, the EU is prepared to explore potential areas for regulatory coordination.
These include topics like automobiles, the bloc’s proposed acquisition of US energy, and collaborative actions on economic security, specifically in relation to Chinese export controls.
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US-EU trade accord faces delays amid new US tariffs
Share:
On Monday, European Union ministers plan to press senior US trade officials to implement further aspects of the July EU-US trade agreement.
Specifically, they will advocate for the US to reduce tariffs on EU steel and eliminate duties on European products like wine and spirits.
US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer are scheduled to meet with EU trade ministers in Brussels.
This trip marks their first visit to the city since assuming their respective offices.
Trade talk agenda
EU ministers are scheduled to convene to address significant global trade challenges.
A key focus will be on the restrictions imposed by China concerning the export of rare earth minerals and microchips, which have broad implications for various industries, according to a Reuters report.
Additionally, the ministers plan to host Lutnick and Greer for a 90-minute working lunch, utilising this time to discuss matters of mutual economic interest.
The agreement reached toward the end of July marked a significant de-escalation in trade tensions between the US and the European Union.
Central to this deal, the US implemented a 15% tariff on a broad range of goods imported from the EU.
Simultaneously, and as a reciprocal measure, the European Union committed to eliminating many of its existing duties that had been levied against imports originating from the US.
This bilateral concession was intended to foster smoother trade relations and mitigate the economic impact of the previous protectionist measures that had characterised the trading relationship.
Ratification delays and EU priorities
However, the full implementation and formalisation of this agreement face substantial delays.
The necessary ratification process is complex, requiring the official approval of both the European Parliament and the governments of all 27 EU member states.
According to diplomatic sources within the EU, this bureaucratic timeline suggests that the deal may not be formally adopted until March or even April of the following year.
This extended period for ratification has reportedly caused considerable frustration and impatience in Washington.
While the 27-nation bloc is firm in its stance that the procedural path to ratification remains firmly on course, it has simultaneously begun to press for progress on additional, agreed-upon areas of contention.
Chief among these priorities for the EU is the unresolved matter of US tariffs on steel and aluminium imports.
The EU is leveraging the current agreement’s approval process to push Washington to address these specific duties, viewing their resolution as essential for a comprehensive restoration of normal trade relations.
New tariffs threaten the agreement
This indicates that despite the current agreement, significant hurdles and sensitive issues, particularly regarding key industrial sectors, remain central to the ongoing trade dialogue.
The July accord is being undermined by recent actions from the United States, according to EU diplomats.
These actions include a 50% tariff on metals, which has been extended since mid-August to include the metal content in 407 “derivative” products like refrigerators and motorcycles, with the possibility of more derivatives being added next month.
Furthermore, the prospect of new US tariffs on critical minerals, trucks, wind turbines, and planes also contributes to the threat of hollowing out the agreement.
The EU bloc is seeking to have a wider array of its goods—such as wine, spirits, olives, and pasta—subjected only to the lower tariffs that existed before the Trump administration.
Furthermore, the EU is prepared to explore potential areas for regulatory coordination.
These include topics like automobiles, the bloc’s proposed acquisition of US energy, and collaborative actions on economic security, specifically in relation to Chinese export controls.
The post US-EU trade accord faces delays amid new US tariffs appeared first on Invezz
In This News
Share:
In This News
Share:
Read More
Commodity wrap: dollar strength, Fed uncertainty weigh on bullion; oil recovers