TMTPOST -- The European Union is reportedly consider concessions including tariff cuts to ease transatlantic trade tensions as the new U.S. levies loom.
Credit：Xinhua News Agency
Learning from meetings this week that the new U.S. auto and reciprocal tariffs that are set to kick off next week can not be avoided, the European Commission has started drawing up a 「term sheet」 for a potential agreement to reduce these levies, Bloomberg on Friday cited people familiar with the matter.
It was reported that the concessions the EU are planning for possible negotiations with U.S. include cutting its duties, mutual investments with the country and easing certain regulations and standards. The EU was said to expect the reciprocal tariffs, which could hit most of, if not all, the European exports to the United State, will likely come in at a range of rate between 10% and 25%. The abovementioned term sheet would set a stage for the European Commission to hold talks with the U.S. after these duties enter effect, per the report.
As part of efforts to avoid intensifying transatlantic tensions, the EU aims to impose minimal fines on Apple Inc. and Meta Platforms Inc. under its Digital Markets Act (DAM) next week, The Financial Times (FT) reported on Friday. The DMA allows for fines up to 10% of a company』s global annual revenue, but the EU was reported to intend to impose fine much lower than that thresholds in case of these American companies. Apple will be fined and ordered to revise its App Store rules over antitrust concerns, while Meta will be fined and will be ordered to change its 「pay or consent」 model, according to the report.
A separate Bloomberg report the same day echoed the FT that EU regulators will likely dole out relatively modest fines against Apple and Meta when compared to antitrust penalties of the past. The move was deemed as an attempt to enforce the EU』s digial act while staying away from escalating tensions with U.S. President Donald Trump since he said the reciprocal tariffs are targeting non-tariff barriers, which could include tech regulations, noted the report.
Trump signed on February 13 a presidential memorandum dubbed "Fair and Reciprocal Plan", and that day ordered the development of a comprehensive plan for restoring fairness in U.S. trade relationships and countering non-reciprocal trading arrangements.
The federal agencies including the U.S. Department of Commerce are required to launch comprehensive examination on non-reciprocal trade relationships with all U.S. trading partners, such as tariffs imposed on United States products, unfair, discriminatory, or extraterritorial taxes imposed on United States businesses, workers, and consumers, including a value-added tax (VAT). Trump repeatedly vowed to implement the reciprocal tariffs on April 2 when the studies complete.
Trump on Wednesday an executive proclamation to impose a 25% tariff on all automobile imports, effective on eastern daylight time April 3 at 12:01 a.m. The new tariff is 「permanent」, Trump underscored in the Oval Office prior to his signing. He told reporters that the tariff will affect 「all cars that not made in the United States.」
The EU officials have indicated they are considering possible retaliations following Trump』s announcing the auto tariffs.
In a statement released late Wednesday, European Commission President Ursula von der Leyen said she deeply regretted the US decision to impose tariffs on European automotive exports. She cited her previous marks that tariffs are taxes are bad for businesses, worse for consumers equally in the US and the EU.
「We will now assess this announcement, together with other measures the US is envisaging in the next days,」 von der Leyen said. 「The EU will continue to seek negotiated solutions, while safeguarding its economic interests.」
The European Commission in a statement on Thursday said it is preparing its response while awaiting the reciprocal tariffs next week. 「If necessary, we will deliver firm, proportionate robust, and well calibrated and timely response to unfair and counterproductive measures from the US,」 Commission spokesperson Olof Gill said. He added that he cannot tell the 「exact timing」 of EU actions until US tariffs come into force.
France will work with the European Commission on a 「riposte,」 with a aim to 「find an accord to dismantle the tariffs」, said French President Emmanuel Macron said at a news conference on Thursday. He warned the auto tariffs would only intensify inflationary pressure in U.S. and hit growth across the Atlantic.
Germany』s economy minister Robert Habeck said it was 「crucial that the E.U. delivers a decisive response to the tariffs,」 adding that 「It must be clear that we will not back down.」 Germany』s chancellor Olaf Scholz called the auto tariff decision wrong. 「The U.S. is thus embarking on a path that will only end with losers,」 he said. 「Because tariffs and isolation cost prosperity for everyone.」
