Former head of the European Commission’s trade department, Jean-Luc Demarty, has urged the EU to respond firmly to the recent imposition of 20% blanket tariffs by the US. He believes that the EU should retaliate with equivalent tariffs on US goods, but should strategically target non-essential products to minimize damage to its own economy. Demarty also advocates for the use of the EU’s anti-coercion tool to restrict access to public procurement and deprive companies of rights like IP licenses. He argues that hitting key sectors such as digital and financial services could have a significant impact on the US economy and political landscape.
Demarty emphasizes the importance of inflicting economic damage on the US to create political consequences, as US voters often base their decisions on the country’s economic situation. He warns that the current US administration is more radical and less open to trade negotiations than in the past, making it crucial for the EU to take a strong stance in response to the tariffs. Demarty suggests that targeting sectors with strong political influence, such as big tech and Wall Street, could be an effective strategy in pressuring the US government to reconsider its trade policies.
The former EU senior official highlights the need for the EU to stand firm in its response and not back down in the face of economic coercion from the US. He criticizes the US administration for denying the EU the ability to apply tariffs that comply with WTO rules and accuses them of using tactics that amount to coercion. Demarty argues that the EU should not hesitate to use all available tools to protect its interests and combat unfair trade practices employed by the US.
Demarty draws on his experience negotiating with the US during the aluminium and steel trade war under the first Trump administration in 2018. He notes that the current administration is more extreme and less likely to engage in open dialogue on trade issues. Despite this, he believes that the EU must remain steadfast in its response and not shy away from imposing significant tariffs on US goods. Demarty’s insights shed light on the challenges and complexities faced by the EU in navigating trade relations with the US during a period of heightened tensions and protectionist policies.
Demarty’s call for a strong and calculated response to the US tariffs reflects a broader shift in the EU’s approach to trade negotiations with the US. By targeting key sectors and utilizing available tools to protect its interests, the EU aims to exert pressure on the US government and push for fair and reciprocal trade practices. Demarty’s expertise and experience offer valuable insights into the intricacies of international trade relations and the strategic considerations that underpin effective negotiation strategies in a complex and evolving global trade landscape.
