Europe in Rush For Initial Trade Framework – Reality of Baseline Tariffs Setting in

Sundance reporting for CTH 

A serendipitous article about information from European Commission officials Björn Seibert and Sabine Weyand, as EU Trade Commissioner Maroš Šefčovič urgently heads to Washington DC for emergency talks Thursday against the backdrop of a July 8 deadline set by U.S. President Donald Trump to do a deal or face 50 percent “reciprocal” tariffs.

Let me just remind everyone the ongoing failure to recognize or accept President Trump’s position regarding both the EU and Canadian trade position with the U.S. will be their undoing.  For whatever reason, likely because it has always been thus for them, they both have a massive cognitive disconnect.

EU trade Commissioner Maros Sefcovic is going to try and avoid the baseline tariffs; however, the aggregate EU now accepts after reviewing the details of the U.S-UK trade agreement, they will not be able to get below 10%.  This alone has them considerably triggered.

The only real tariff positions the EU have to try and escape are the auto tariffs (25%) and Steel/Aluminum (50%).  There is no way for them to avoid the baseline 10% on everything.   Keep in mind President Trump will add a tariff surcharge for Spain’s refusal to meet their NATO obligations.  Trump cannot single out Spain, so the entire EU will be punished with the surcharge for not bringing them into line.

BRUSSELS — The outline of a trade deal between the EU and the U.S. is taking shape. It would contain a baseline 10 percent U.S. tariff, relief for specific industries and an “up-front” U.S. commitment to tariff relief, four diplomats told POLITICO.

[…] Brussels is pushing to secure a U.S. commitment to “up-front” tariff relief at the time of the agreement in principle, according to the diplomats. This would resemble a deal already struck by the U.K. with Washington, which offered tariff exemptions on auto and steel exports while talks on a comprehensive deal continue. A number of EU countries told the Commission no deal of any kind would be possible without such relief.

[…] EU Trade Commissioner Maroš Šefčovič is flying to Washington for a crunch round of talks on Thursday with U.S. Trade Representative Jamieson Greer. He is due to brief EU countries on their outcome on Friday.

In this potentially decisive round, Šefčovič is expected to signal that the EU still hopes to reduce the 10 baseline tariff that Trump imposed on most U.S. trading partners in April. However, under certain conditions, the bloc will say it could accept the 10 percent, according to the diplomats, who were granted anonymity to speak candidly about the closed-door talks.

Second, the EU is pushing for lower rates for key sectors, such as pharmaceuticals, semiconductors, alcohol and commercial aircraft — as sought by German Chancellor Friedrich Merz. The Commission, however, “sees the chance for this happening as quite small,” one of the diplomats said.

Additionally, Brussels still hopes to bargain down Washington’s tariffs of 25 percent on cars and 50 percent on steel and aluminum. According to another diplomat, concessions on steel are most likely, while the first diplomat quoted above said the idea would be to “create a ring of protection” around the EU and the U.S. against Chinese overproduction. (more)

President Trump is a modern honey badger on these issues. He genuinely doesn’t care about the EU position and is perfectly willing to send them a letter outlining their tariff rate.   The EU just cannot fathom this level of in-your-face ambivalence.

With the BBB battle almost behind us, MAGA is on the cusp of a whole ‘nuther level of winning; international edition.