EU Commission Reportedly Open to 10% US Tariff as Trade War Prevention Measure
According to the German business newspaper Handelsblatt, the European Union’s Commission is willing to accept a blanket 10% US tariff as a means of preventing a trade war. High-ranking Commission officials have confirmed that the desired agreement with the United States could ultimately result in a 10% tariff, but the Commission emphasizes that it would only accept a higher US tariff under clear conditions and not as a long-term solution.
Previously, Commission negotiators had insisted on a mutual tariff reduction. However, the assessment has now prevailed that US President Trump will hold firm on a minimum 10% tariff, as he needs it to finance his planned tax cuts. “It will end up being a 10% tariff – that’s like a hidden tax increase for the Americans” a Commission official told Handelsblatt.
The Brussels negotiators hope to avert higher US tariffs on cars, pharmaceuticals and microelectronics by accepting a blanket 10% tariff. However, the Americans have not yet agreed to cap their auto tariff at 10% against the EU. If the US does agree to reduce its auto tariff, the EU is willing to lower its import tariffs on US vehicles and recognize certain US product standards, such as crash tests for vehicles. Additionally, the EU plans to ban Russian gas in its entirety in order to increase demand for US gas.
According to EU sources, the offer to Washington also includes so-called “non-tariff trade barriers” – EU regulations that Trump has repeatedly criticized. “We want to wrap up a big package. Trump must be able to sell it as a big win” a Commission official said. One idea is to incorporate the already planned deregulation of the supply chain directive and reporting obligations into the agreement, so that Trump can “celebrate it as a big win” in the US.