US President Donald Trump is said to support imposing a minimum duty of 15% to 20% on imported products from the European Union in any agreement with the bloc, as indicated to the Financial Times by three individuals familiar with the discussions.
Additionally, sources familiar with the negotiations state that Trump is also unfazed by the EU's latest offer to reduce tariffs on cars and is willing to keep them at 25%.
In this regard, a US official told the British newspaper that the Administration is considering setting a reciprocal tariff higher than 10%, even if an agreement is reached with the EU.
On the other hand, the newspaper cites two knowledgeable sources in pointing out that Maros Sefcovic, EU Commissioner for Trade, offered a pessimistic assessment of his recent talks in Washington to EU ambassadors on Friday.
This tougher stance by the US President would seek to test the EU's tolerance threshold after weeks of negotiations on a framework agreement to maintain a base tariff of 10% for most of the Twenty-Seven's products, thus putting the EU in a compromised position as the August 1st deadline approaches, when Trump announced he will impose a 30% tariff on all imports from the EU.
On the other hand, the EU has indicated it would retaliate against such a measure but is divided on adopting countermeasures and could be forced to accept a base tariff higher than 10% in any agreement.
If Trump insists on permanent reciprocal tariffs of 15-20%, these would be as high as when trade negotiations began in April. The US has also imposed sectoral tariffs of 50% on steel and aluminum from the EU.
The EU has prepared several retaliatory packages but has repeatedly postponed their implementation, linking them to Trump's latest negotiation deadline, August 1st. These European retaliations include tariffs on ¤21 billion of annual US imports, including chicken and jeans, which would take effect on August 6th.
The European Commission, responsible for trade policy, has also proposed retaliations against ¤72 billion of annual US imports, including Boeing aircraft and bourbon, if negotiations fail.
Furthermore, a third list of measures against services is being prepared, and a person familiar with the latest proposal suggested it would include levies on digital services and online advertising revenue. US tariffs affect ¤380 billion of the EU's annual exports, out of a total of ¤532.3 billion. The United States is the bloc's largest single market and accounts for one-fifth of exports.