EU Halts US Trade Talks: Awaiting Clarity on Trump’s Latest Strategy

FRANKFURT – European officials found themselves in a state of confusion on Monday, seeking clarity regarding the implications of President Donald Trump’s announcement of a 15% global import tax on their recently negotiated trade agreement. This uncertainty has led EU lawmakers to temporarily halt the ratification process until more information is available.

The European Parliament’s trade committee decided to delay a crucial vote on the agreement following Trump’s declaration of the new tariff, a move prompted by the U.S. Supreme Court rejecting his previous attempt to use emergency powers for setting import taxes. In response, Trump invoked a different section of trade law to enforce the 15% global tariff, which is set to be implemented on Tuesday.

“A deal is a deal,” emphasized Olof Gill, a spokesperson for the European Commission, encapsulating the EU’s stance. “We are now asking the U.S. to demonstrate how they plan to adhere to the agreement.”

The trade agreement between the U.S. and EU initially established a 15% tariff limit on most European imports, while reducing tariffs on U.S. industrial goods to zero. Despite increasing tariffs from an average of 4.8%, the deal provided stability for businesses, allowing them to strategize effectively—a key factor credited with helping Europe stave off a recession the previous year.

Bernd Lange, chair of the parliament’s trade committee, noted that the newly announced 15% tariff would exceed the previously agreed tariff ceiling, as it would be additional to the existing tariffs. Consequently, lawmakers have postponed the committee vote originally scheduled for Tuesday.

Questions surrounded other trade deals done with individual countries including Brazil, India and Britain. For instance, Britain agreed a 10% maximum tariff with the US, while India settled on 18% and Vietnam accepted 20%. Although the Supreme Court decision did not directly affect bilateral deals, they were negotiated using threats of imposing the now-invalidated tariffs as leverage. However re-opening those deals could backfire because Trump has made clear he will pursue tariffs under other laws than the one the Supreme Court said he could not apply.

US Trade Representative Jamison Greer said Sunday on US network CBS’ “Face the Nation” program that the administration had made clear to negotiating partners that Trump was intent on tariffs whether the Supreme Court ruled against him or not, that “whether we won or lost, there were going to be tariffs.”

He said that the bilateral deals “are good deals, we expect to stand by them, we expect our partners to stand by them.”

Moving from country-specific tariffs to the flat 15% global tariff “will have considerable implications elsewhere,” said Atakan Bakiskan, US economist at Berenberg bank. The new tariff means a reduced rate for some countries, for example Brazil, which faces a reduction of nearly 15 percentage points and China, which sees a reduction of nearly 10 percentage points.

Under the law Trump relied on, these latest tariffs are in effect for only 150 days unless Congress votes to extend them. Trump could use that time to search for other legal provisions that would support his actions.

While uncertainty hits European companies, it puts pressure on the U.S. economy as well, where consumers and companies pay the tariffs on goods purchased from abroad. “Uncertainty around trade policy appears here to stay – putting continued pressure on the US economy,” Bakiskan said.