EU Governments Seek Quick Deal with US to Avoid 50% Tariffs

Strategic Insights -

Several EU governments are urging a quick agreement with the US to prevent Donald Trump's threat of 50% tariffs on the bloc, with leaders making phone calls to US President Trump and European Commission President Ursula von der Leyen to negotiate a deal. Italian Prime Minister Giorgia Meloni held an emergency call with Trump, followed by a conversation with von der Leyen, who then persuaded Trump to delay the tariffs from June 1 to July 9. The US President welcomed the "good exchange" between himself and von der Leyen, while French President Emmanuel Macron and Spanish Foreign Minister Jose Manuel Albares expressed support for the bid to accelerate talks. The European Commission is set to conduct trade policy, with EU Trade Commissioner Maros Sefcovic scheduled to speak with US Commerce Secretary Howard Lutnick.

Key Takeaways:

  • Italian Prime Minister Giorgia Meloni held an emergency call with US President Trump, followed by a conversation with European Commission President Ursula von der Leyen, to negotiate a deal on trade tariffs.
  • Von der Leyen persuaded Trump to delay the increased tariffs from June 1 to July 9, according to Trump's post on his Truth Social network.
  • Spanish Foreign Minister Jose Manuel Albares said talks were going in the "right direction" after the phone call between Trump and von der Leyen.
  • French President Emmanuel Macron welcomed the "good exchange" between Trump and von der Leyen, and expressed hope for a deal to reduce tariffs.
  • EU governments have approved a €21bn package of up to 50% tariffs on US goods, including maize, wheat, motorcycles, and clothing, which will kick in on July 14 without a deal.
  • The European Commission is consulting member states on a €95bn list of other targets, including Boeing aircraft, cars, and bourbon.
  • Member states maintain that they have not made enough progress responding to US demands to cut the trade surplus.

Statistics:

  • €21bn: The package of up to 50% tariffs on US goods approved by EU governments.
  • 50%: The maximum tariff rate imposed on US goods, including maize, wheat, motorcycles, and clothing.
  • €95bn: The value of the list of other targets, including Boeing aircraft, cars, and bourbon, on which the Commission is consulting member states.
  • 14/6: The date on which the increased tariffs will kick in without a deal, June 14.
  • 9/7: The new date on which the increased tariffs will kick in, July 9.
  • June 24-25: The dates of the Nato summit, at which Trump will meet with European leaders, including Giorgia Meloni.

Sources:

  • "Several EU governments have signalled they want a quick deal with the US to head off Donald Trump's threat of 50 per cent tariffs on the bloc, urging the European Commission to keep talking to Washington rather than taking the path of confrontation." - The Financial Times.
  • "Italian Prime Minister Giorgia Meloni held an emergency call with Trump hours after the US president delivered his threat on Friday, Italian officials said." - The Financial Times.
  • "Von der Leyen's spokeswoman, Paula Pinho, said the commission president and Trump had agreed to 'fast-track' talks, with a second call in four days between lead negotiators yesterday." - The Financial Times.