Trump Proposes New Deal and Additional Tariffs in EU Trade Dispute
In a recent escalation of the trade conflict with the European Union, U.S. President Donald Trump has announced plans to send a letter proposing a deal and additional tariffs on specific imports. During a press conference, he indicated optimism about reaching an agreement with the EU, stating that a letter could be dispatched within days.
Trump highlighted the improved treatment of the U.S. by the EU officials, specifically mentioning President Ursula von der Leyen and her team. He characterized the current engagement as a 'new world,' noting that the EU had previously been one of the toughest trade partners for the U.S., even more challenging than China.
As part of his ongoing tariff strategy, Trump confirmed plans to impose an additional 50% tariff on copper imports, along with potential tariffs on pharmaceuticals, semiconductors, and other unspecified goods. This follows his earlier implementation of high tariffs, reaching up to 25% on cars and auto parts, as well as 50% on steel and aluminum imports. The administration's tariff policies aim to rectify perceived trade imbalances and encourage domestic production.
According to Bernd Lange, the chair of the European Parliament's Trade Committee, current negotiations between the U.S. and EU are limited to a few pages of proposals. The anticipated framework agreement is described as relatively concise, focusing on establishing specific import volumes for automobiles that could be subject to lower or zero tariffs. Lange emphasized the importance of utilizing the current pause in tensions to develop a comprehensive solution for all existing and proposed tariffs.
The European Commission has criticized the proposed tariffs as unjustified and in violation of World Trade Organization (WTO) rules. This ongoing dispute has already adversely affected the German economy, with recent statistics showing a significant decline in exports to the U.S., which is Germany's largest trading partner. In May, German exports to the U.S. dropped by 7.7% month-on-month, marking the lowest level in over three years and contributing to a continued downward trend in overall German exports.
Dirk Jandura, president of the BGA export association, remarked on the dire situation in foreign trade, warning that it could worsen further due to the implications of Trump's tariff policies.
U.S. Treasury Secretary Scott Bessent expressed hopes that the additional tariffs would generate substantial revenue, projecting over $300 billion by the end of 2025. These tariff revenues are deemed essential for funding Trump's significant tax reduction promises.
Recently, Trump sent numerous letters detailing tariff guidelines to various countries in Asia, while postponing the deadline for new import duties by nearly a month. The revised deadline for the new tariffs, originally set for July 9, is now slated for August 1. Trump reiterated on his social media platform that this timeline is firm, stating that no extensions will be granted.
However, during a press interaction, Trump appeared somewhat flexible about the August 1 deadline, suggesting that he would consider proposals from trade partners before making a final decision.