Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Trade between the EU and US will be “almost impossible” if Donald Trump imposes the 30 per cent tariffs he has threatened, the bloc’s trade commissioner has said.
Maroš Šefčovič’s comments ahead of a meeting of EU trade ministers on Monday came after the US president warned over the weekend that he would impose duties at that level on the EU from August 1.
“If you’re talking about 30 per cent or 30 per cent plus, there will be a huge impact on trade,” Šefčovič said. “It will be almost impossible to continue trading as we are used to in a transatlantic relationship.
“Transatlantic supply chains would be heavily affected on both sides of the Atlantic. Show me one industry leader who is happy about this tariff policy,” he added.
Šefčovič will brief EU ministers at a meeting in Brussels on Monday on the state of talks with the US as the bloc considers possible retaliatory measures.
He told reporters ahead of the meeting: “The feeling on our side was that we are very close to an agreement.”
But Trump confounded Brussels — and some EU officials say his own negotiators — with his letter containing the new tariff threat posted to his Truth Social platform on Saturday.
Trump’s so-called reciprocal tariffs were originally set at 20 per cent in April, then dropped to 10 per cent to allow time for negotiations, before the president announced the latest 30 per cent threat.
Šefčovič said he would talk to US commerce secretary Howard Lutnick on Monday afternoon in a push for a deal.
But diplomats also expect him to propose a new package of possible retaliatory tariffs against the US to EU member states. They will cover about €72bn of annual US imports, two diplomats said, after governments lobbied for some exemptions from an original €95bn list.
The commission is delaying a separate plan to hit €21bn of annual US imports — drawn up in response to Trump’s separate duties on imports of steel, aluminium and cars from the EU — until mid-August to allow time for talks.
Šefčovič said the imposition of 30 per cent reciprocal tariffs would mean the EU had nothing to lose if Trump escalated with even higher numbers in response.
“Thirty per cent or anything above 30 per cent — any additional counter-reaction from the United States — it has more or less the same effect. So practically, it prohibits trade,” he said.
Larger member states have been reluctant to strike back at the US for fear of provoking Trump.
Friedrich Merz, the German chancellor, and Giorgia Meloni, the Italian premier, both talked up the prospects of a negotiated deal and warned against a trade war at the weekend.
In his letter announcing the duties to European Commission president Ursula von der Leyen, Trump said the US would increase the tariffs beyond 30 per cent to match any retaliatory levies by the EU.
Lars Løkke Rasmussen, the foreign minister of Denmark, which holds the rotating presidency of the EU, said the bloc was considering measures against services.
He said the EU should also consider using its most powerful tool, the anti-coercion instrument (ACI), dubbed a “trade bazooka”. The ACI allows the EU’s executive arm to impose restrictions on trade in services if it determines that a country is using tariffs on goods to force changes in policy.
“If you want peace, you have to prepare for war,” Rasmussen said.
But von der Leyen said at the weekend that it was not yet time to use the ACI.
Šefčovič also said on Monday that Brussels was consulting other “like-minded” trading partners about a co-ordinated response, without naming any countries.
Trump has levied 10 per cent “reciprocal tariffs” on most of the world, along with 50 per cent national security tariffs on steel and aluminium and 25 per cent on vehicles and parts. So far, only the UK, Vietnam and China have agreed partial deals with Washington, with the latter two still locked into high tariffs.
Credit: Source link
