The commission is responsible for trade on behalf of the EU鈥檚 27 member states, but wanted a steer on how to approach the economically critical talks with the White House. Trump has threatened to impose 50% tariffs on all EU goods from 9 July unless the two sides reach a deal. Most EU goods already face a 10% tariff, with levies of 25% on cars and car parts and 50% on steel and aluminium.
Von der Leyen also floated a 鈥渂eginning of redesigning鈥 the World Trade Organization amid concern the global trading system is being undermined by trade wars and bilateral deals. She said the Asia Pacific CPTPP bloc, which also includes the UK, was interested in 鈥渟tructured collaboration鈥 with the EU, which wanted the same. 鈥淲e can think about this as a beginning of redesigning the WTO 鈥 to show the world that free trade with a large number of countries is possible on a rules-based foundation,鈥 she said.
As Trump鈥檚 deadline draws near, differences are emerging between Germany and France over how to handle the US talks.
The German chancellor, Friedrich Merz, said a quick and simple trade deal was better than 鈥渟low and complicated鈥. The new centre-right chancellor is under heavy pressure from German carmakers and other exporters, some of whom argue that an asymmetric deal 鈥 ie higher US tariffs on European goods 鈥 may be better than no deal.
The French president, Emmanuel Macron, argued that accepting an unequal trading relationship would be damaging to Europe鈥檚 long-term competitiveness. One EU diplomat rejected the suggestion member states were divided, but said: 鈥淚f we accept 10%, how long will it last?鈥, suggesting Trump could launch a new front in the trade war, or that it could affect negotiations with other trading partners. 鈥淢any member states realise this is not only one game. Maybe it will affect the way India approaches us, or China.鈥
Taoiseach Miche谩l Martin, said: 鈥淕etting a deal is important for certainty so that we know the landscape ahead of us and that industry knows the landscape ahead of it, so that we can protect jobs, which is our number one priority.鈥
Striking a more outspoken note, Spain鈥檚 prime minister, Pedro S谩nchez, said Trump鈥檚 tariff threat was 鈥渄oubly unfair鈥, because his country runs a trade deficit with the US. He was responding after Trump said Spain would 鈥減ay twice as much鈥, after S谩nchez refused to commit to the 5% Nato spending target.
Diplomats are increasingly pessimistic about negotiating away the 10% baseline tariffs. As this reality sinks in, two approaches are emerging: a quick deal that would mean certainty for business, or retaliation to press for something better. 鈥淒o we go into aggressive retaliation mode or are we less vocal and do a quick deal,鈥 said one source.
The US has shown little obvious interest in the EU鈥檚 offer of a 鈥渮ero-for-zero鈥 free-trade zone on industrial goods, while continuing to attack the bloc鈥檚 tech regulation and VAT rules. Earlier this week, von der Leyen reiterated that changes to the EU鈥檚 Digital Markets Act 鈥 regulations affecting US tech companies 鈥 was off the table.
鈥淥f course we discuss tariff lines, we discuss non-tariff barriers like standards and norms 鈥 but where it is the sovereign decision-making process in the European Union and its member states that is affected this is too far.鈥
Belgium鈥檚 prime minister, Bart De Wever, said tariffs should be avoided at all costs. 鈥淪o we will not allow ourselves to be provoked, we will remain calm, we will negotiate and we hope to reach an agreement. If this is not the case, we will naturally adopt countermeasures, but these will be appropriate countermeasures,鈥 he said.
The EU has suspended levies on 鈧21bn (拢18bn) US goods until mid-July to allow more time for negotiations. The bloc is consulting on further retaliatory tariffs targeting 鈧95bn of US goods, although the final total is likely to be smaller, if approved. The EU previously dropped plans to target American bourbon, after protests from France and Ireland, who feared retaliation against French cognac and Irish whiskey.
Merz criticised the EU鈥檚 approach as too complicated at an industry conference in Berlin on Monday. He also suggested the EU should concentrate on negotiating in five sectors including the automotive and steel industries, which have been already been hit with tariffs, and pharmaceuticals, which remain in Trump鈥檚 crosshairs.
Peter Leibinger, the president of the German Federation of Industries (BDI), said at the same conference that he [Merz] needed to 鈥渃arry the pain鈥 being felt by German manufacturers to the Brussels bubble.
The BDI said the tariffs would cost the German economy approximately 0.3 percentage points of growth, depressing an economy 鈥渨here industrial production remains significantly below the pre-crisis level of 2019鈥.
The EU鈥檚 chief trade negotiator, Maro拧 艩ef膷ovi膷, said: 鈥淭he car industry of Europe, it鈥檚 clearly bleeding. And really to have tariffs at the level of 27.5%, which is a scary state, it is clearly unsustainable.鈥 Carmakers face a 25% tariff, in addition to the 2.5% that pre-dated Trump鈥檚 second term.
艩ef膷ovi膷 said his 鈥渙ne wish鈥 was unity in the EU鈥檚 approach. He was 鈥渞eady to fight tooth and nail鈥 for the EU鈥檚 interests, telling German business leaders to 鈥渢alk to us, criticise us, but support us鈥.
He also revealed he was seeking an insurance clause in any deal: 鈥淚 think it would be clearly desirable 鈥 that we would have some kind of stand still clause, which would kind of prevent a surprise with sudden spikes [in tariffs] and volatility.鈥
鈥 The Guardian