Earlier this week, U.S. and European Union trade officials met in Brussels. They periodically evaluated the progress of their newly minted trade liberalizing framework. This meeting comes on the heels of a tentative agreement reached this past July. This deal fixed the agreed-upon tariff rates and added new commitments to deepen transatlantic trade relations.
Earlier this summer, the U.S. signed on to a deal to slap a 15% tariff on European goods. This rate is substantially lower than the much higher tariffs that had been earlier threatened. European leaders hailed the deal as a way to lower tariffs and increase European investment into the U.S. economy. They thought it would lead to greater access for American agricultural products in European markets.
Tensions remain over metal exports. European officials believed they had secured an exemption—or at least an agreement to minimize tariffs—on a 15% tariff on their metal exports to the U.S. Rather, they’re currently faced with a whopping 50% tariff on these goods. The U.S. has expanded its list of products subject to these tariffs, further raising the stakes and making negotiations more difficult.
At the same time, Europe is extremely enthusiastic to get exemptions for certain products. Specifically, they’re trying to shield products such as wine, cheese and pasta from the current tariffs. Just last week, the Trump administration agreed to remove these costly tariffs on tropical fruit and coffee. This change creates a dangerous precedent for future concessions on other products.
As negotiations continued, U.S. negotiators clearly indicated that they were very much looking for concessions regarding digital taxes. They want these concessions included within the overall trade agreement. Our officials contend that these taxes are mainly targeted against American companies doing business in Europe.
“They would like to have steel and aluminium as part of this package and we think it is very, very important that they understand our digital companies and they reconsider their digital regulations to be more inviting to our big companies,” – Howard Lutnick
European officials have consistently and publicly insisted that discussions over the digital taxes would not be up for negotiation. The Biden administration has pushed for an internationally negotiated, compromise framework to govern these taxes.
“This is not discriminatory. It is not aimed at American companies,” – Howard Lutnick