Trump’s ultimatum drastically shortened the timeline for doing a deal to save the €1.6 trillion transatlantic trade relationship: He originally imposed a 20 percent “reciprocal” tariff on most goods from the EU on April 2, only to slash it to 10 percent a week later and leave 90 days to hammer out an accord before the higher rate kicks back in.
European stock markets turned red on the news. The DAX index, made up of 40 of the largest German companies, fell 2.2 percent, while France’s CAC 40 slid 2.7 percent. Gold, a traditional safe asset, gained 2.1 percent. The price of Brent crude oil, an indicator of expected future economic activity, also fell 1.1 percent.
The fresh threat came hours before a call between EU Trade Commissioner Maroš Šefčovič and U.S. Trade Representative Jamieson Greer to seek a basis for negotiation to head off a full-scale trade war.
The call takes place just days after Brussels responded to the U.S. administration with a newly tweaked list of concessions it is willing to offer, as first reported by POLITICO.
The Financial Times reported earlier on Friday, however, that Greer was expected to reject the EU’s proposals, demanding unilateral concessions instead of mutually reducing tariffs.
The clash exposes fundamental differences between how the U.S. and EU think about trade, with Trump the deal maker colliding with the bloc’s process-driven approach.
