By Philip Blenkinsop and Trevor Hunnicutt
BRUSSELS/WASHINGTON, July 23 (Reuters)
Trade talks are bringing two continents together. It’s not always clear how a handshake in one region of the world can have an impact well beyond its boundaries in an uncertain global economy. But many of the goods we purchase and the jobs we depend on are the result of business dealings that are rarely reported on the front page and are made in boardrooms and summit halls. These agreements can help nations cooperate even when their interests don’t always match, open opportunities for enterprises, and influence the flow of goods across international borders.
A trade deal is coming together, and there could be an agreement
The European Union and the U.S. are moving toward a trade deal that could include a 15% U.S. baseline tariff on EU goods and possible exemptions, two European diplomats said on Wednesday, potentially moving President Donald Trump closer to another major trade agreement on the heels of the one he just unveiled with Japan.
European negotiators were hoping to reach an agreement to dodge the 30% tariff rate Donald Trump has said he would impose on imports from the 27-nation bloc on August 1. The rate, which could also extend to cars, would mirror the framework agreement the U.S. has struck with Japan, which Trump announced late on Tuesday.
Trump and the white house seem to be serious about the 50% tariff still
There could be concessions for sectors like aircraft and lumber, as well as some medicines and agricultural products, which would not face tariffs, the diplomats said. Washington does not, however, appear willing to lower its current 50% tariff on steel, they said. The White House did not immediately respond to a request for comment.
Trump trade adviser Peter Navarro told Bloomberg News the report from the EU should be taken with “a grain of salt.” As talks continued, the European Commission said it would press on with potential countermeasures in case a deal was not reached. This is an agree-to-disagree type of situation, and it looks like we just have to embrace it.
A signal to Europe, a deal in Japan
The administration of President Donald Trump and Japan signed a new strategic trade and investment deal earlier this month. Many experts view this agreement as a model that could spur similar actions between the United States and Europe, according to IEU Monitoring and Yahoo Finance. It goes beyond simply updating trade regulations.
The goals of the U.S.-Japan agreement are to increase collaboration on vital technologies and supply chains, promote new investments, and reduce trade obstacles. For Washington, it’s a means of fortifying relations with a significant ally in Asia and ensuring more steady shipments of commodities like energy resources, automobiles, and electronics.
Tariffs on Japan’s auto sector will drop from 27.5% to 15% as part of the agreement, reviving hopes for similar treatment for European cars. Asian and European stock markets rallied as investors cheered the U.S.-Japan agreement, but U.S. stocks showed a more modest rise and earnings reports were gloomy. American businesses making everything from chips to steel reported downbeat results on Wednesday.
They revealed how the Trump administration’s chaotic trade policy has hurt profits, added to costs, upended supply chains and weighed on consumer confidence. Now that the U.S.-Japan deal is on the table, some European officials and business leaders have new hope that long-standing obstacles can be overcome, and there is some light ahead. They think that some aspects of the Japan agreement could serve as a model for increasing trade between the EU and the US, particularly in areas like advanced manufacturing, digital services, and green technology.
GCN.com/Reuters.