Donald Trump has escalated his demands in trade negotiations with the European Union, pushing for a minimum tariff of 15 to 20 per cent in any deal with the bloc, according to three people briefed on the talks, reports the Financial Times.
The US president’s hardened stance aims to test the EU’s pain threshold after weeks of talks on a framework agreement that would have maintained a baseline tariff of 10 per cent on most goods.
People familiar with the negotiations say Trump has also been unmoved by the latest EU offer to reduce car tariffs, and would be happy to keep duties on the sector at 25 per cent as planned.
Maros Sefcovic, EU trade commissioner, gave a downbeat assessment of his recent talks in Washington to EU ambassadors yesterday, according to two people briefed on the meeting.
One US official told the FT the administration is now looking at a reciprocal tariff rate that exceeds 10 per cent, even if a deal is reached.
The position puts the EU in a bind as it approaches an August 1 deadline, where Trump said he will impose a 30 per cent tariff on all its imports.
The EU has indicated it would retaliate over such a move, but is divided over taking countermeasures and may be forced to accept a baseline of more than 10 per cent in any deal.
In a sign of the mounting pessimism in Europe over the shape of a deal, German chancellor Friedrich Merz warned yesterday that Washington remained sceptical about offers to reduce the sectoral tariffs.
“Whether we can still create sectoral rules, whether we can treat individual sectors differently from others, is an open question,” he said. “The European side supports this. The American side views it more critically.” Merz added.
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