On Thursday, the European Commission put forward new legislation aimed at removing tariffs on U.S. industrial goods, a step expected to pave the way for Washington to lower its tariffs on European automobiles.
Putting forward the legislation is a precondition for President Donald Trump’s administration to drop tariffs on European cars to 15 percent from the current 27.5 percent. Under the terms of the transatlantic trade deal unveiled a week ago, the U.S. would in turn backdate the reduction in its auto tariffs to Aug. 1, News.Az reports citing Politico.
“The first act concerns a proposal to eliminate tariffs on U.S. industrial goods and provide preferential market access for a range of US seafood and non-sensitive agricultural goods,” the European Commission said in a press release.
“The second one proposes to prolong the tariff-free treatment of lobster, now including processed lobster.”
The agreement, EU trade chief Maroš Šefčovič said last week, was good news for the bloc’s auto industry, which has been “bleeding a lot of cash” in recent months.
“This will save car makers more than €500 million in duties that would have otherwise been paid for exports in one month only,” Brussels added in its statement.
The handshake trade deal reached between Trump and European Commission President Ursula von der Leyen in Scotland at the end of July would set a baseline U.S. tariff on European exports of 15 percent. The EU would meanwhile scrap industrial tariffs — including the 10 percent it currently levies on autos made in the United States. Brussels has also committed to open its market wider for a basket of U.S. farm exports.
The next key question is whether the United States will indeed make good on its side of the bargain. Trump cast the fragile transatlantic trade truce into doubt earlier this week when he threatened new tariffs on countries who apply digital policies that he deems discriminatory.
A senior Commission official was confident this would go through.
“There should not be any doubt: their tariffs on cars and car parts should go down. That is the U.S. part of the bargain,” the official, speaking on condition of anonymity, told a briefing.
