The European Commission has formally presented its trade strategy to EU member states, detailing both potential concessions and a list of goods that could face new tariffs if negotiations with the Trump administration falter. This dual approach, revealed by EU officials, is aimed at securing the necessary political backing from the bloc’s 27 countries while negotiating from a position of strength with Washington.
Strategic offers and internal divisions
The proposed concessions, known as the “term sheet,” include initiatives such as increasing investments in energy and potentially relaxing some of the EU’s own regulatory standards. Additionally, the Commission has not ruled out reducing tariffs on imported vehicles or implementing a mutual zero-for-zero tariff arrangement for industrial goods. Areas for collaboration with the U.S., particularly concerning China’s trade barriers and overproduction, are also being explored.
However, EU diplomats have expressed caution regarding the internal dynamics of the EU, where differing opinions among member states could complicate the negotiation process. While some nations are hesitant to appear submissive to U.S. demands, others are keen to maintain strong ties with a historical ally.
Trump’s tariffs and EU’s response
The briefing for European ambassadors was delivered by top officials from the Commission, including President Ursula von der Leyen’s chief adviser Björn Seibert and the lead trade official Sabine Weyand. This meeting was crucial for maintaining unity among EU countries as they navigate the 90-day pause on certain U.S. tariffs announced by Trump, with the EU’s response currently suspended until mid-July.
In addition to potential offers, the EU is actively formulating a response to the existing 25 percent tariffs on cars and a 10 percent tariff on various EU goods. Earlier expectations had suggested a focus on services, such as technology giants and financial institutions, yet the Commission has opted instead for a more traditional retaliation strategy centered on goods. This decision aims to avoid escalating tensions with the Trump administration.
Countries like France and Belgium are advocating for a more comprehensive approach, urging the Commission to utilize all available tools in response to U.S. tariffs. France, in particular, has been vocal about the necessity of a robust counter-response, especially to protect its vulnerable cognac industry. A French official emphasized, “The counter-measures must be applied to the entire spectrum, not just goods, but should also include all the instruments we have.” President Macron has echoed this sentiment, suggesting that the EU consider employing its anti-coercion instrument, colloquially referred to as the “bazooka.”
Macron and von der Leyen are anticipated to discuss these tariff issues further in a meeting scheduled for Monday in Paris, coinciding with an event focused on science and research.
The Financial Times was the first to report on the new list of potential tariffs on goods.