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There is “a big gap” between the EU and US on tariffs ahead of an August deadline to strike a trade deal, the EU’s lead negotiator has warned.
Maroš Šefčovič’s comments came after Donald Trump warned over the weekend that he would impose tariffs of 30 per cent on the EU from August 1.
“We’ve been quite close in agreeing the text on the [trade] agreement in principle, but there have been clearly areas where we have quite a big gap between our two positions,” Šefčovič said after a meeting of EU trade ministers on Monday.
He had earlier warned that tariffs of 30 per cent on EU imports would make transatlantic trade “almost impossible”.
The US president confounded Brussels — and some EU officials say his own negotiators — by declaring he would levy 30 per cent “reciprocal” tariffs on the bloc on August 1 in a letter posted to his Truth Social platform on Saturday.
“If you’re talking about 30 per cent or 30 per cent plus, there will be a huge impact on trade,” Šefčovič said. “It will be almost impossible to continue trading as we are used to in a transatlantic relationship.”
Trump’s reciprocal tariffs were originally set at 20 per cent in April, then dropped to 10 per cent to allow time for negotiations, before the president made the latest 30 per cent threat.
Šefčovič briefed EU trade ministers at the meeting in Brussels on the state of talks with the US, as the bloc considers possible retaliatory measures.
Šefčovič is due to talk to his US counterparts later on Monday in a push for a deal.
He will also propose a new package of possible retaliatory tariffs against the US to EU member states. They will cover about €72bn of annual US imports, after governments lobbied for some exemptions from an original €95bn list.
The commission is delaying until August 6 a separate plan to hit €21bn of annual US imports — drawn up in response to Trump’s separate duties on imports of steel, aluminium and cars from the EU — to allow time for talks.
In his letter announcing the 30 per cent duties to European Commission president Ursula von der Leyen on the weekend, Trump said the US would increase tariffs even higher to match any retaliatory levies by the EU.
Šefčovič said if talks with the US fail “we have to protect the EU economy and we need to go for these rebalancing measures”.
“The message [from EU trade ministers at Monday’s meeting] was the strongest since we started the discussion with the US,” he added.
But Thomas Byrne, Ireland’s Europe minister, told the Financial Times that most countries had urged Brussels to keep talking to Washington rather than retaliate.
“We’ve been here before where this [talks] keeps getting extended. That’s not good for investor confidence. It’s not good for the stability that we all need. But that is preferable to a trade war,” Byrne said.
Lars Løkke Rasmussen, the foreign minister of Denmark, which holds the rotating presidency of the EU, told reporters on Monday that the bloc was considering measures against US services.
He said the EU should also consider using its most powerful tool, the anti-coercion instrument (ACI), dubbed a “trade bazooka”.
The ACI allows the EU’s executive arm to impose restrictions on trade in services if it determines that a country is using tariffs on goods to force changes in policy.
Von der Leyen said at the weekend that it was not yet time to use the ACI but Šefčovič insisted “all instruments” were being considered.
Šefčovič also said on Monday that Brussels was stepping up consultation with “like-minded” trading partners, without naming any countries.
“We want to compare notes. Secondly, we also want to discuss how this is affecting the economy, trading patterns, and of course, we are very obviously also discussing what we can do to trade more with each other,” he added.
Trump has levied 10 per cent reciprocal tariffs on most of the world, along with 50 per cent national security tariffs on steel and aluminium and 25 per cent on vehicles and parts.
So far, only the UK, Vietnam and China have agreed partial deals with Washington, with the latter two still locked into high tariffs.
