EU trade commissioner Maroš Šefčovič is traveling to Washington to meet with US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer to discuss advancing negotiations on tariffs. The EU is looking to find win-win outcomes and mutually beneficial deals with the US to avoid harmful escalations that could damage both sides of the Atlantic. The EU has proposed levelling US and EU tariffs to 0% on industrial goods, in an effort to avoid further tensions.
Commission President Ursula von der Leyen has offered zero-for-zero tariffs for industrial goods as a way to resolve the current trade disputes between the US and the EU. The US currently imposes 25% tariffs on EU imports of aluminium and steel, 25% tariffs on EU cars, and 10% tariffs on various goods. The Commission has suspended retaliation measures against US products in hopes of giving negotiations with the US a chance to progress. The EU is keen to avoid a full-blown trade war and is working towards finding a mutually agreeable solution with the US.
EU Economy Commissioner Valdis Dombrovskis has assessed the impact of the trade war initiated by the US administration. According to Commission figures, the US GDP could see reductions of 0.8% to 1.4% up to 2027, while the EU’s GDP impact would be less severe, around 0.2%. However, if tariffs were to become permanent or if targeted countries were to retaliate, leading to a trade war, the economic consequences could be more severe. This scenario could result in reductions of 3.1%-3.3% for the US, 0.5%-0.6% for the EU, and a decline in global trade by 7.7% over three years.
The EU is committed to finding diplomatic and negotiated solutions to the ongoing trade disputes with the US. By offering to eliminate tariffs on industrial goods, the EU is showing its willingness to engage in fair and mutually beneficial negotiations with its American counterparts. The suspension of retaliation measures against US products demonstrates the EU’s desire to avoid escalating tensions and to give diplomacy a chance to prevail in resolving trade conflicts.
The potential impacts of a prolonged trade war between the US and the EU are concerning, with projected GDP reductions for both sides. The EU is taking a pragmatic approach by assessing the economic consequences of different scenarios and emphasizing the need for dialogue and cooperation to prevent further damage to global trade and economies. By highlighting the negative effects of a trade war, EU officials are underscoring the importance of finding peaceful and collaborative solutions to trade disputes.
As negotiations between the EU and US continue, there is a recognition of the need for compromise and flexibility from both sides to reach a satisfactory resolution. The EU is making efforts to engage in productive discussions and find common ground with the US to avoid detrimental consequences for both economies. By prioritizing diplomacy and economic stability, the EU is aiming to protect its interests while seeking to maintain a strong and mutually beneficial trade relationship with the US.
