Making Strides in Tariff Talks and the EU-US Economy
Proposed Directive by the Commission on Harmonizing Food Labeling Laws Among Member States
In a positive turn of events, negotiations between the European Union (EU) and the US regarding tariffs are gaining traction. Minister of Economy, Commerce and Enterprise, Carlos Cuerpo, applauded this progress and emphasized the need for unity among the Twenty-Seven member states to act as a significant trading bloc and engage in equitable discussions with leading economic powers.
"We're making strides in outlining the fundamental discussions points, and in recent weeks we've received some promising news," Cuerpo shared with media in Brussels during his visit for the Council of Ministers of Foreign Trade of the EU.
Cuerpo is optimistic about reaching a "fair and balanced" agreement with the Trump Administration. As part of a temporary truce between both parties, they have allotted 90 days for dialogue. While the US maintains a tariff of 10%, instead of the initially proposed 20%, it seems that the Republican president's "Liberation Day" tariff of 10% remains in place[1].
The EU Commission appears optimistic about recent agreements between the Trump Administration and China and the UK, although it expresses concern that the 10% tariff may be permanent, similar to the situation in the UK[1].
Embracing the Battlefield: Impact on Spain
As for the EU-commissioned list of tariffs on US goods valued at around €95 billion, in case negotiations with Trump falter, Cuerpo declared it as "preliminary" and still under debate among the Twenty-Seven.
With the previous list of products taxed in response to tariffs on steel and aluminum, "the European Commission was already quite receptive to the requests of the Member States," Cuerpo reassured about the potential impact on Spanish companies.
He further stressed the importance of maximizing the positive impact on foreign markets while minimizing the impact on Spanish importers. It's essential to remember that negotiation remains the top priority[1].
Countermeasures Creeping In
In the event of a potential failure in negotiations, the EU has taken steps to prepare for possible retaliation. A public consultation on potential countermeasures has been launched, which could include additional import duties on goods such as aircraft, automobiles, and industrial machinery[3]. Products under consideration account for €95 billion in US imports[3]. Should negotiations collapse, these measures could serve as a foundation for EU retaliation.
Closing Thoughts:
- Active Talks: Positive dynamics in the negotiations, but moving below the 10% tariff baseline may be difficult[1].
- Spanish Economy: Although impacted by broader trade dynamics, Spain is less concerned than some other EU states[1].
- Countermeasures: Continued preparation for potential EU retaliation through tariffs on US imports, focusing on sectors like aviation and automotive industries[3].
- The European Union and the US are seeing progress in their tariff talks, with the aim of reaching a fair and balanced agreement during the temporary truce.
- Minister Carlos Cuerpo, emphasizing the importance of unity among the EU member states, expressed optimism about the negotiations but acknowledged that moving below the current 10% tariff baseline may be challenging.
- Should talks fail, the EU has prepared countermeasures, considering additional import duties on goods such as aircraft, automobiles, and industrial machinery as potential retaliation against the US.
