Brussels assesses the latest announcement of the American administration as “Serious step back” and warns that in the event of the fiasic prognosis in accelerated mode, he will launch the approved retaliation worth EUR 21 billion and will expand them with an additional list of goods worth EUR 95 billion.
The Commission reserved that retaliation tariffs may enter into force on July 14 or earlier, if the circumstances require it, and the protection of EU employees, consumers and enterprises remains priority.
The EU has its strategy
The EU negotiating strategy includes on the one hand attempts to reduce duties and barriers of non -trollery, and on the other, a proposal to strengthen regulatory cooperation in high -added sectors, such as semiconductors or pharmaceuticals.
Brussels makes progress in liberalization dependent on the explicit unlocking of the American market for European industrial and agricultural products, and especially from the withdrawal of the White House from the plan of “mutual tariffs” for cars and automotive parts.
Current tensions are the next installment of the dispute, which began in March 2018, when the Trump administration first imposed – based on section 232 of the Act on the expansion of trade of 1962 – duties in the amount of 25 percent. for steel and 10 percent on aluminum. The EU then responded with retaliation tariffs to goods worth $ 2.8 billion, including Whiskey, motorcycles and jeans.
In 2021, under the rule of Joe Biden, the pages included a temporary suspension of the dispute, replacing tariff contingents. The current administration in Washington, however, restored previous rates and announced their doubling.
For European companies, this means an increase in cost uncertainty again. Energy consuming industries – metallurgy, car industry or household appliances manufacturers – signal that 50 % duties can disturb the supply chains and lower the margins in the second half of the year. In turn, American exporters are afraid of losing key markets. On the EU list of potential retaliation duties include Boeing aircraft, Bourbon from Kentucky or soy of Louisiana. This deliberately hits the states of high political weight.
Important dates ahead of us
In a short term, investors should observe three dates. First of all, on June 5, when a consultation meeting of ministers for trade ministers takes place in Brussels, which may approve the fine for accelerated implementation of repression.
Secondly, July 9 – the final date of the White House ultimatum. Third, July 14, when the EU tariffs come into force, unless the compromise is achieved.
Until then Brussels declares his readiness to dialogue, but also announces that it will not leave escalation unanswered.
In the long run, the result of talks will determine whether transatlantic relations will return to the track of gradual liberalization of trade. This is a scenario preferred by the industry on both sides of the Atlantic. However, if they enter the confrontational spiral, enterprises and consumers will feel even more.
