US President Donald Trump said on Saturday he would impose 30% tariffs on most EU imports from Aug 1, though diplomats say there is still time to hammer out an agreement to prevent this.
European trade commissioner Maros Sefcovic said he had sensed that talks with US counterparts were approaching “a good outcome for both sides”, but the new tariff threat had created “a new dynamic”.
A 30% tariff rate would make it almost impossible to continue trading as before, with enormous consequences for supply chains and negative impacts on both sides of the Atlantic.
“And therefore I think we have to do, and I will definitely do, everything I can to prevent this super-negative scenario,” he told reporters before a meeting of EU ministers to discuss trade.
Despite Trump’s letter, Sefcovic said he understood that US negotiators were willing to continue negotiations, though he warned that the EU would need to prepare for all outcomes, including possible countermeasures.
The commission has proposed suspending the EU’s first package of potential tariffs on €21 billion (US$24.5 billion) worth of US goods.
An initial suspension was due to expire by midnight today.
It is also likely to seek the green light today for a second package that would hit €72 billion of US goods.
Danish foreign minister Lars Lokke Rasmussen agreed that it was too early to impose countermeasures and that he hoped the EU would remain united on that front.
“But we should prepare to be ready to use all the tools.
“If you want peace, you have to prepare for war. And I think that’s where we are,” he added.
French trade minister Laurent Saint-Martin said the EU should go beyond what the commission had outlined to date, saying the bloc should also look at targeting US services or use its wide-ranging “anti-coercion” instrument.
This instrument allows the bloc to retaliate against third countries that put economic pressure on EU members to change their policies.
“This balance of power desired by Donald Trump is a balance of power in which you must demonstrate your ability to fight back.
“And this is perhaps where we need to accelerate today,” Saint-Martin said.