EU Prepares to Scrap US Import Duties to Prevent Trump Tariff Hike
EU Negotiations and Trade Deal Developments
By Philip Blenkinsop
Background of the EU-US Trade Deal
BRUSSELS, May 19 (Reuters) - European Union negotiators were expected to agree on Tuesday to scrap import duties on U.S. goods to comply with the trade deal struck with the United States last year and ward off U.S. President Donald Trump's threat of much higher tariffs.
Under the terms of the deal struck at Trump's Turnberry golf resort in Scotland last July, the EU agreed to remove import duties on U.S. industrial goods and grant preferential access to U.S. farm and sea produce. In exchange, the United States would impose tariffs of 15% on most EU goods.
Legislative Hurdles and Safeguards
However, nearly 10 months on, the European Parliament and the Council, the body representing EU governments, still have to agree on a legislative text before the EU duty reductions can enter force, with the main divisions over safeguards in case Trump reneges on the agreement.
Final Negotiation Rounds
Negotiators from the parliament and council will meet for what was expected to be a final round of talks starting at 9 p.m. (1900 GMT). EU lawmakers involved in the negotiations were confident a deal would be struck late Tuesday or very early on Wednesday.
Trump's Tariff Threats and EU Response
Trump Set July 4 Deadline
TRUMP SET JULY 4 DEADLINE
Trump has said he would impose much higher tariffs on EU goods including cars if the European Union did not implement its trade deal commitments by July 4, having earlier threatened to raise tariffs on EU car imports to 25% from the current 15%.
Legislative Delays and Political Tensions
EU lawmakers have twice paused the required legislation after Trump's threats to impose new tariffs on European allies who did not back his proposed acquisition of Greenland and after the U.S. Supreme Court struck down his global tariffs.
Timeline for Approval
Assuming a deal is reached, then the bloc should meet Trump's July 4 deadline, with a final vote of approval in the European Parliament then expected in mid-June.
Safeguard Proposals and Diverging Views
EU Lawmakers' Demands
EU lawmakers want tougher safeguards, including a "sunrise clause" under which the EU would only cut duties when the United States fulfilled its side of the deal, the possibility to suspend the deal if the U.S. breached the terms, and a "sunset clause" to end EU tariff concessions on March 31, 2028.
EU Governments' Concerns
EU governments have had less appetite for inserting such items, concerned they could antagonise the Trump administration and create uncertainty for EU businesses.
(Reporting by Philip Blenkinsop; Editing by Alex Richardson)
