EU faces transition period with US after Trump tariff move, says EU trade chief

The European Union is facing a "transitional period" of a few months in relations with the U.S. after President Donald Trump's new "import surcharge", which threatens to undermine the trade deal the two sides struck last year, European Trade Commissioner Maros Sefcovic said on Tuesday.

The EU trade chief told a hearing of the European Parliament that U.S. counterparts, Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, had reassured him that they stood by last year's agreement.
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"Of course, what is now ahead of us, this is the transitional period where they are figuring out how to deal with this really landmark court ruling and we are talking every day," he said, noting the surcharge could be in place for up to 150 days, providing a July 24 deadline to find a solution.

"When I was talking to my counterparts yesterday, today, they believe that it will happen even in a shorter period of time, three, four months," he continued.

US LOOKING INTO METAL CONTENT TARIFFS

The United States imposed a temporary 10% surcharge on all goods not covered by exemptions on Tuesday after the Supreme Court struck down Trump's global tariffs. Trump said on Saturday he would increase the rate to 15%.

Sefcovic urged Parliament's trade committee, which postponed a planned vote on removing EU import duties, to proceed with a vote in March. There would still then need to be negotiations between lawmakers and EU governments on a common text before a final EU assembly vote.

Many lawmakers have complained that the deal is lopsided. However, they had appeared willing to accept it, albeit with conditions, opens new tab, such as an 18-month sunset clause. They have also criticised a 50% U.S. tariff imposed in August on the steel and aluminium content of more than 400 products such as wind turbines and motorcycles, saying it undermines the EU-U.S. deal struck in July.

"I got reassurances from U.S. colleagues that they know that this is a big problem for us and that they're looking into this matter, and hopefully we will be having better news in that regard rather soon," Sefcovic said.
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The trade deal sets a 15% U.S. tariff rate for most EU goods, while the EU committed to remove import duties on many U.S. goods.

Assuming Trump's new surcharge supersedes the deal, some of the EU's zero-tariff exemptions could disappear. The new tariffs could also be placed on top of pre-existing "most-favoured-nation" U.S. duties, which is not the case under the EU-U.S. deal. For example, for some cheeses, the 10% surcharge could bring the overall tariff to about 25%.

Source: Reuters