Currently, imports of many European goods are subject to an additional 10 percent tariff. If no deal is reached by August 1, US President Donald Trump threatens to raise tariffs to 30 percent.
Steel and aluminum are already subject to a 50 percent tariff, affecting Tata Steel in IJmuiden, among others, in the Netherlands. According to insiders, the European Commission—which negotiates on behalf of all member states—is doing its best to achieve some relief for this sector.
There is a scenario for working with quotas: the import tax would then be reduced to 15 percent, but as soon as exports exceed the quota, a rate of 50 percent still applies.
Ultimately, Donald Trump decides
But much remains uncertain, according to Brussels."Ultimately, US President Donald Trump will make the decision," a diplomat warns.
European Commissioner Maroš Šefčovič (Trade) met with US Commerce Secretary Howard Lutnick again on Wednesday. No announcements were made afterward.
Heavy countermeasures
Meanwhile, Brussels is continuing to work on a package of countermeasures in case a deal is not reached. On Thursday, EU member states will be asked to agree to import tariffs of up to 30 percent on hundreds of American products, from jeans to Boeing aircraft. The countermeasures could take effect on August 6.
EU member states also discussed launching measures against the US services sector on Wednesday. According to diplomats, there is sufficient support for the use of heavy economic weapons in the event of a no-deal.
Meanwhile, Europe is strengthening ties with other major economies. On Wednesday, EU leader Ursula von der Leyen visited Japan for a trade mission. Brussels and Tokyo already have a free trade agreement but want to develop it further. There will also be increased cooperation on critical raw materials and the defense industry.
Negotiations on a free trade agreement with Indonesia are well-advanced, and a breakthrough with India is hoped for later this year. An EU-China summit is scheduled for Thursday in Beijing, but expectations are not high due to all the trade tensions.
