Can EU safe swift commerce pact with Trump like China, UK? – DW – 05/16/2025 | EUROtoday

Eager to keep away from a looming 20% tariff on its trans-Atlantic exports, the European Union has agreed to “intensify” commerce talks with the United States after being accused of transferring too slowly. EU Commissioner Maros Sefcovic gave the replace Thursday earlier than a gathering of EU commerce ministers in Brussels, including that he and his US counterpart Howard Lutnick have been as a result of meet “very soon.”

The EU summit was anticipated to solidify the bloc’s place in negotiations to keep away from the extra levies that kick in from July after US President Donald Trump sealed his first offers since saying so-called reciprocal tariffs on most international imports final month.

Following a tense standoff, Washington and Beijing reached a momentary deal final week, slashing punitive tariffs from over 100% to extra sustainable ranges. While negotiations for a long-term deal intensify, for the subsequent 90 days, Chinese items coming into the US will incur a 30% tariff, whereas exports from the US to China will face a ten% levy.

Days earlier, Trump secured the first define of a commerce deal since proclaiming April 2 as Liberation Day. The broad pact with the United Kingdom reduces tariffs on British carmakers exporting to the US and grants American exporters, together with farmers and ethanol producers, enhanced entry to the UK market.

Trump below strain to safe EU deal

While Trump continues to play hardball with Brussels, claiming earlier this week that “in many ways Europe is nastier than China,” Andrew Kenningham, chief Europe economist for the London-based Capital Economics analysis home, thinks financial pressures will stop him from pushing Brussels too far.

“The two new deals will make EU negotiators more confident that they can stick broadly to the policy already set out, which is to try to avoid escalation, threaten some retaliation but with a delay, while at the same time be willing to negotiate,” Kenningham instructed DW.

Even so, Capital Economics warned in a analysis observe this week that an EU-US deal “appears harder to reach,” pointing to the bloc’s giant items commerce surplus with the US and the problem of reaching consensus among the many 27 EU member states.

The EU has already threatened new tariffs on €95 billion ($107 billion) of US items in response to Trump’s earlier tariffs on aluminum, metal and European automakers, however paused them to permit negotiations to proceed. Brussels can also be contemplating curbs on scrap metal and chemical exports to the US.

Trump obscure on calls for from EU

Claudia Schmucker, head of the Center for Geoeconomics on the German Council on Foreign Relations (DGAP), does not assume the China and UK offers actually “change anything.”

“Trump is still expecting that the EU will offer something he feels is valuable enough,” Schmucker instructed DW, including that the president’s calls for from Europe stay a “mystery,” however are prone to embrace extra agriculture and power imports.

The EU has to date provided to spice up imports of US liquified pure fuel (LNG), superior AI know-how and soybeans, whereas proposing zero-for-zero tariffs on all industrial items. Brussels has, nevertheless, dominated out decreasing different US irritants — from gross sales tax (VAT) and rules, which Trump perceives as giving the bloc an unfair benefit in commerce.

Last yr, the US had a $235.6 billion (€210 billion) commerce deficit in items with the EU, a 12.9% improve on the earlier yr, in keeping with the Office of the US Trade Representative. The newest 2023 knowledge from Eurostat, the EU’s statistics company, places the EU items surplus at €157 billion.

DGAP’s Schmucker thinks the president’s damaging rhetoric, which included an unfounded declare that the EU was created to “rip off” the US, performs into Brussels’ arms as EU states attempt to achieve consensus on the best way to proceed, whilst Hungary, Italy and a few others push for bilateral offers.

“Even though some EU states are not fully on board with Brussels’ negotiating position, Trump’s antagonism is enough to help boost EU unity,” Schmucker instructed DW.

Ahead of Thursday’s talks, Swedish Trade Minister Benjamin Dousa was uncertain a few speedy US-EU deal, saying he did not assume it was probably within the “coming weeks.” If Trump retains the baseline 10% tariff imposed on all imports as introduced final month, because it did for the UK, Dousa mentioned: “The US can expect countermeasures from us.”

EU: A key marketplace for US companies exports

Miguel Otero, senior fellow for worldwide political financial system at Spain’s Elcano Royal Institute, believes the US “has a lot to lose” from any Trump misstep.

“The EU has a big deficit when it comes to services, especially financial and digital services and entertainment platforms,” Otero instructed DW. “The US can’t afford to lose the European market. If we act as a single entity, then the EU has as a lot leverage as China.

Although the EU has a big items surplus with the US, with a fifth of EU items crossing the Atlantic final yr, the bloc additionally accounts for 25% of US companies exports, price $275 billion in 2024. Including Switzerland and the UK, 42% of US companies exports are despatched to the European market.

The European Commission, the bloc’s government arm, vowed this week to launch a dispute on the World Trade Organization in opposition to Trump’s “reciprocal” tariffs and levies on automobiles and auto components.

Higher tariff deadline approaches

As the July 8 deadline for the 90-day pause on “reciprocal” tariffs on the EU approaches, the window for a deal is narrowing. Trump will face a crucial resolution: revert to the upper tariffs introduced in April or lengthen the pause.

Capital Economics predicts that Trump will delay the pause however might push negotiations to the brink, sustaining strain on buying and selling companions. The analysis home warned of a brand new “flashpoint” within the coming months, probably reigniting the market volatility noticed final month.

Speaking forward of Thursday’s Brussels negotiations, Germany’s Economy Minister Katherina Reiche, nevertheless, struck a extra optimistic tone, emphasizing the US’s important function as a commerce companion for the EU.

“We negotiate from a position of economic strength … but one that must be wielded carefully,” Reiche mentioned. “A solution is essential, as escalation will leave no winners.”

Edited by: Ashutosh Pandey