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Despite a US court’s rebuke of former President Donald Trump’s tariff agenda, meetings between EU and US trade negotiators are set to proceed as planned next week. These discussions, involving EU trade commissioner Maroš Šefčovič and his US counterparts, are expected to occur during the OECD ministerial meeting in Paris. This confirmation comes after the US Court of International Trade ruled Trump’s “liberation day” tariff programme illegal.
The ruling impacts several duties announced on April 2, including a baseline 10 percent tariff. However, sectoral levies of 25 percent on imports of cars, steel, and aluminium from the EU remain.
This court decision comes at a pivotal moment. Following a recent standoff with the EU, Trump declared a 50 percent tariff on goods from the bloc, which he later retracted after discussions with European Commission president Ursula von der Leyen. The commission, as reported by the Financial Times, informed member states that the 10 percent “reciprocal” tariff rate was likely to remain, indicating a reduction from its previous stance.
The EU is also considering reducing regulations that concern US businesses and has begun efforts to simplify laws and reduce bureaucracy. The 10 percent duty impacts about 70 percent of EU exports, valued at around €380 billion. Previously, the US insisted that this rate was non-negotiable.
Former EU trade official Ignacio García Bercero, currently at the Bruegel think-tank, emphasized the importance of focusing on steel, aluminium, and car tariffs, advising against using the court ruling as an excuse to withdraw from negotiations. He suggested the EU should seek solutions for affected sectors and collaborate with the US on issues of overcapacity and subsidies.
Joost Pauwelyn, a partner at Cassidy Levy Kent in Brussels, warned that backing away might inadvertently escalate the US-EU trade conflict. He suggested that Trump could leverage domestic law to maintain pressure, potentially leading to further escalation.
Former UK trade official Allie Renison, now with SEC Newgate, noted the increased uncertainty the ruling poses for US trading partners and highlighted the need for a stable basis in negotiations due to the potential damage from sectoral tariffs.
An EU diplomat involved in the trade talks mentioned that the ruling has provided the EU with additional time, indicating there was no need to rush. The commission has declined to comment on the US court’s decision.
