EU sources tell Bloomberg that the best scenario right now would be if the negotiating deadline is extended beyond July 9.
The Trump administration is currently applying – with Donald Trump's tariff pause in place – 10-percent tariffs on almost all EU goods. There are also so-called sectoral tariffs in place, at 25 percent on cars and car parts and 50 percent on steel and aluminum. Per Altenberg, trade strategist at the National Board of Trade, emphasizes that the current tariffs are significantly higher compared to before.
Trump has also flagged sectoral tariffs on pharmaceuticals, semiconductors, and aircraft.
Unbalanced proposal
It is unclear exactly what the US's latest bid looks like, but it is described as an unbalanced proposal, where the US retains most of the tariffs that apply during the so-called tariff pause.
The EU has prepared countermeasures in two packages, but has, according to EU sources, pushed to abolish as many tariffs as possible between the EU and the US in the negotiations with the Trump administration.
Trump's willingness to compromise has not been shown so far. But what is being said now does not have to be the final result, Altenberg means.
In the end, it's about the US's willingness to relate to the rules they themselves have been involved in negotiating in the WTO (World Trade Organization).
If they want to completely abandon the rule-based trade system – it's clear that the EU shouldn't follow at any price.
Facilitate trade
On Friday, European Commission President Ursula von der Leyen came out with a new proposal that means the EU is teaming up with other like-minded countries to facilitate trade with other parties than the US, according to Altenberg.
Trump has, with a so-called tariff pause, set a deadline for the talks with the EU on tariffs to July 9, when almost all exports from the EU to the US will get tariffs of 50 percent if no agreement is reached, according to previous information from the White House.
Altenberg believes that such high tariffs are unlikely.
It's the one who imposes tariffs that gets hurt the most themselves. We've noticed that before, not least capital markets and stock markets have reacted negatively.
Minister for Foreign Trade Benjamin Dousa (The Moderate Party) says in a written comment to TT that he looks positively on the fact that there is movement in the EU's negotiations with the American administration. "We want to cross the finish line as soon as possible to get rid of the volatility and uncertainty, but are preparing countermeasures in parallel if needed".
