Description: Before the China – EU Summit, representatives from the EU Commission have reportedly informed the EU member states that a potential trade deal with the US could be concluded which would include 15% of tariffs on EU exports to its largest strategic partner. Trump previously threatened to impose 30% tariffs on all EU exports to the US which additionally increased pressure on the bloc to rapidly agree towards trade concessions in order to preserve relatively stable relations with the US. EU Trade Commissioner, Maros Sefcovic met with US Commerce Secretary Howard Lutnick, before the Commission’s briefing of the member states regarding the deal. German Chancellor Friedrich Merz, while on an official state visit to France also indicated progress in the trade talks with the US and stated that negotiations have progressed rapidly over the past week. French President Macron also commented the trade talks and reiterated his country’s position of protecting Europe’s economic interests. The information arrives as the US concluded the deal with Japan, and EU officials are set to visit China on the 50th anniversary of the EU – China partnership in Beijing, where President Xi Jinping would also attend. Europe also reportedly set retaliatory tariff measures equaling $100 billion in case the trade talks with the US collapse.
Impact: Trump’s sweeping Asia tariff and trade tour most certainly pressured the EU into a position of geoeconomic submission where the bloc evidently would have to compromise on the bilateral trade agreement much more than the US. Relations between the EU and the US have been considerably strained since Trump became President, with Europe readapting towards the new reality that enshrines the transatlantic partnership. The 15% benchmark set by the US – Japan trade deal could also apply to Europe, however, significant revenue industries for the bloc of countries would be impacted, such as the German car industry, the beverage industries and in some parts, the agricultural industries. Recent developments have demonstrated that Europe wants to avoid aggravating its partnership with the US by any means necessary, as the imposition of the so – called anti – coercion instrument in the trade talks was avoided and voted in favor only by France. This instrument could have allowed the EU to impose immediate counter tariff measures but also to ban US tech services on the continent, significantly impacting the US tech industry. Europe would most probably make even further trade concessions with the US accepting the conclusion of the trade negotiations, following the EU – China Summit.