EU Trade Commissioner Maroš Šefčovič hopes the US and the EU will be able to avoid imposing mutual tariffs. After talks with new US Commerce Secretary Howard Lutnick and, incoming Trade Representative Jamieson Greer and National Economic Council Director Kevin Hassett in Washington, Šefčovič said he had proposed mutual reductions in tariffs and trade barriers and moves to adjust the trade balance. The aim was to avert a trade war with the US and to show a willingness to cooperate, including on the challenge from China, he said.
Four hours of talks touched on a range of mutual grievances and underscored the need for further action to avoid a damaging clash between their respective economies.
“I think we just need to keep talking, use the momentum that we generated yesterday and focus on a more positive agenda rather than imposing measures and counter-measures,” he told a news conference at the EC delegation in Washington.
Šefčovič said he had proposed a mutual reduction in tariffs on all industrial products, as well as on cars. The EU, he stressed, was prepared to reduce tariffs on US cars from the prevailing 10% to the 2.5% that the US applies. However, he pointed out, the EU wants Washington to lower the 25% tariff it imposes on US imports of trucks and pickups.
As for the VAT issue that President Donald Trump and other officials have singled out in recent weeks as an example of “unfair” trade practices by the EU, akin to a tariff, Šefčovič said he had tried to explain to his US counterparts that this was the equivalent of the US sales tax, not a tariff and not a tax that discriminated against foreign companies.
Noting that the Americans had listed a series of complaints about non-tariff trade barriers in the EU, the Commissioner made a point of saying that Europe also aired its own list of grievances regarding US practices. He had suggested that the US hold off on the tariffs it had announced to allow the two sides time to resolve mutual issues. He hoped the US would not impose tariffs on EU steel and aluminium. Instead, the US and the EU should cooperate on steel, given their common and global problem with the flood of cheap steel resulting from Chinese overproduction. He cautioned, however, that if the US did opt to finally impose tariffs, the EU’s response would be “firm and proportionate”.
Turning to the differences in trade statistics kept by both sides, Šefčovič stated that, contrary to the Trump administration’s assertion that the US deficit in trade in goods with the EU is $150 billion, once trade in services is taken into account, it is in fact $50 billion, while the value of the entire trade is $1.7 trillion. He went on to point out that the average US tariff on EU goods is 1.4%, whereas the EU tariff on US goods is 0.9%. Most US goods, he noted, are not subject to tariffs and he was confident that the 50 billion deficit could be reduced “quickly and easily” increasing Europe’s LNG purchases.
Addressing criticism of the EU’s treatment of US Big Tech giants, Šefčovič noted that in many cases the EU offers them a bigger market than the US, accounting for 30-50% of their revenues. He also said that in his discussions he had explained how EU digital regulations exist to protect “small guys” from abuses by the big ones.
After returning from Washington, the Commissioner will meet with representatives of EU countries and the automotive industry to discuss further steps.
