There was potential for a tough European response, but it does not appear to be relevant now, after Japan’s agreement with the Americans set a precedent for a 15% tariff.
The EU and the US are nearing a trade agreement that would result in a 15% tariff on European exports to the US, allowing the EU to avoid the 30% tariff from August 1 that US President Donald Trump has otherwise threatened.
This is reported by the Financial Times, citing three unnamed sources.
As part of the agreement, both the US and the EU would also agree not to impose tariffs on certain types of products, including aircraft and aircraft parts, alcohol, as well as medical equipment and products.
The news follows in the wake of the trade agreement announced by the US and Japan on Tuesday evening, which imposes a 15% import tariff on Japanese goods.
“The Japan agreement clarified the terms of the pressure,” an EU diplomat told the Financial Times.
“Most member states are holding their noses but could accept this deal.”
Since the beginning of April, European goods have been subject to a base tariff of 10%. The US government introduced this when it suspended its original plan for a retaliatory tariff of 20% for 90 days.
The retaliatory tariff was set at half of what Donald Trump believed the EU’s tariffs and duties on US goods to be. The US calculation was 39%, but in reality, that figure was derived by examining the exchange ratios between the US and the respective countries.
Donald Trump has previously criticized the EU over the VAT imposed on the sale of goods from the US, even though all goods, including European ones, are subject to VAT.
The potential upcoming 15% tariff rate will reportedly also include a 4.8% tariff that existed on goods from the EU before the additional 10% base tariff was imposed.
.\˙ MarketWire
