EU must be ready for decisive action over US tariffs: Germany
BERLIN: The European Union will need to take “decisive” action to counter US tariffs if no “fair” deal is reached with Washington to avert threatened levies, Germany’s finance minister said on Sunday.
Lars Klingbeil told the Sueddeutsche Zeitung newspaper that “serious and solution-oriented negotiations” with the US were still necessary, but added that if they fail, the EU would need “decisive counter-measures to protect jobs and businesses in Europe”.
On the other hand, German Chancellor Friedrich Merz said he will work intensively with French President Emmanuel Macron and European Commission President Ursula von der Leyen to resolve the escalating trade war with the United States.
“I discussed this intensively over the weekend with both Macron and Ursula von der Leyen,” Merz told German broadcaster ARD.
“We want to use this time now, the two and half weeks until August 1 to find a solution. I am really committed to this.”
On Saturday, US President Donald Trump announced that the EU and Mexico would be targeted with steep 30 per cent tariffs as of August 1.
In the case of the EU, he cited the US’s trade imbalance with the bloc as justification for the new levies.
But Klingbeil said the tariffs would have “only losers” and “threaten the American economy at least as much as businesses in Europe”.
He said that “Europe remains determined and united: we want a fair deal.”
“Our hand remains outstretched but we won’t accept just anything,” Klingbeil said, and added that contingency measures in the case of no deal “must continue to be prepared”.
‘PROPORTIONATE COUNTERMEASURES’
Soon after Trump on Saturday announced the move, French President Emmanuel Macron called on the EU to “defend European interests resolutely”.
“In particular, this implies speeding up the preparation of credible countermeasures, by mobilising all the instruments at its disposal, including anti-coercion, if no agreement is reached by August 1st.”
Similarly, van der Leyen expressed her readiness to respond through “proportionate countermeasures”.
But on Sunday, von der Leyen expressed the hope of successful EU-US talks.
The European Union prefers a negotiated solution on trade with the United States, von der Leyen said, adding that the bloc would extend its suspension of countermeasures to US tariffs till early August.
“The (anti-coercion) instrument is created for extraordinary situations, we are not there yet,” she added, a reference to a tool that allows the EU to go beyond traditional tariffs on goods and impose restrictions on trade in services too.
The EU’s current suspension of its retaliation over US steel and aluminium tariffs had been set to expire overnight Monday to Tuesday.
TRUMP TRADE WAR
Both sets of duties would take effect August 1, Trump said in separate letters posted to his Truth Social platform, citing Mexico’s role in illicit drugs flowing into the United States and a trade imbalance with the EU respectively.
Actually, the latest move is an attempt to ramp up pressure for obtaining favourable deals in his trade wars.
The duties are higher than the 25 per cent levy Trump imposed on Mexican goods earlier this year, although products entering the United States under the US-Mexico-Canada Agreement are exempted.
Canada earlier received a similar letter setting out 35 per cent tariffs on its goods.
The EU tariff is also markedly steeper than the 20 per cent levy Trump unveiled in April, as negotiations with the bloc continue.
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