During the night, the President of the United States, Donald Trump, presented new bids on when the tariff rates against the EU – and several other countries – will come into force. Instead of today, August 1, as Trump previously said, it will now be August 7.
The President of the European Commission, Ursula von der Leyen, and the President of the United States, Donald Trump, agreed on the "most important parameters" for trade relations between the EU and the United States on July 27. But the EU points out that it is a first step in a process that will cover additional areas.
There is still a lot to be hammered out in terms of details, what has actually been agreed upon, says Michael Koch, head of the National Board of Trade's unit for economic analysis.
He emphasizes that he does not have insight into negotiations or documents. The tariff agreement is actually a political agreement and not legally binding.
There is no document with several hundred pages that is clear about what this means, says Koch.
And the opinions seem to be divided on what applies to the remaining parts – depending on which side of the Atlantic you are on.
Different bids
What seems to be completely clear is that 70 percent of the EU's exports will be subject to a 15 percent tariff. What will apply to the remaining 30 percent is uncertain. According to the EU, it will mean reduced, no or a maximum of 15 percent tariff rates. This also applies to those that are subject to the US's so-called 232 investigation. This means that the US is reviewing tariff rates for sectors and goods such as medicines, steel, and copper.
The US, on the other hand, has threatened with significantly higher tariffs on medicines and wants to continue investigating the matter.
If this is true, it is a continued uncertainty about what will apply, says Koch.
"Facilitate"
The Union commits to making new investments in the US for $600 billion at the same time. The EU also intends to purchase American natural gas, oil, and nuclear energy products to the value of $750 billion over the next three years. According to the EU, this also includes the plan to completely stop buying Russian energy.
The problem is that the EU cannot decide what decisions companies should make, something the Commission also points out. However, they will "facilitate contacts between relevant buyers and sellers within the EU".
According to the European Commission, the EU and the US will continue with the negotiations. Such negotiations can take months, reports Bloomberg.
