The EU has repeatedly suspended 21 billion euros of US imports, including steel, aluminum, cars, motorcycles and poultry, to make time for negotiations. However, this suspension expires on July 14th. As this is less than a month from today, the EU is currently a dilemma between retaliation or risk of recession.
Originally, US President Donald Trump threatened to raise tariffs on EU imports from the first 25% to a drastic 50%, with talks going on until the July deadline. For this reason, Brussels prepared the response. This is a list of 21 billion euro anti-crimes, as it could potentially expand to 900 million euros if an agreement is not reached by mid-July.
Currently, the EU has some predicaments, such as the Bernd Lange (a member of the German European Parliament), who says the bloc is ready to retaliate immediately from July 14th, once US tariffs come into effect.
Meanwhile, some analysts warn that a 50% tariff could significantly disrupt industries such as automobiles, steel and pharmaceuticals. They also warn that this could drag the eurozone into a recession and encourage the ECB (European Central Bank) to cut fees further.
There is also a gap between the members of the country. For example, France is leaning towards retaliation, while Italy and Hungary support ongoing dialogue.
British style trade
The EU is currently considering a UK-style trade agreement with the US rather than a full tariff rollback by the July 14 deadline. This includes mutual 10% tariffs on goods and plans to negotiate and reduce tariffs on sensitive items such as steel and cars later.
At this point, the consensus appears to be drifting towards a gradual approach starting with modest mutual tariffs before delving into sector-specific reductions.
EU Trade Commissioner Maloshuschoffchovich is reportedly overseeing sector tariff debates with US Secretary of Commerce Howard Rutnick. Other EU officials are involved in the office of US trade representatives on other issues.
With July 14th approaching, the deal could escalate one of the few remaining major geoeconomic flashpoints. However, failure can turn emotions towards the risk of disappointment, inspiring central banks to act faster or more aggressively.
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