[BRUSSELS] The European Union said it agreed to accelerate negotiations with the US to avoid a transatlantic trade war, signalling a more amicable approach just days after US President Donald Trump criticised the bloc for taking advantage of the US and slow-walking talks.
“There’s now a new impetus for the negotiations,” Paula Pinho, a spokesperson for the European Commission, told reporters on Monday (May 26), a day after Commission President Ursula von der Leyen spoke with Trump by phone. “They agreed both to fast track the trade negotiations and to stay in close contact.”
Following the call, Trump extended the deadline to hit the EU with 50 per cent tariffs by more than a month to Jul 9 to allow for more negotiations. “We had a very nice call and I agreed to move it,” Trump told reporters on Sunday.
Talks so far have been beset with a multitude of problems, with no clear path to finding a middle ground that will appease them both. The Europeans have complained that it’s not clear what the US wants or even who speaks for the American president, and the US has said the EU unfairly targets US companies with lawsuits and regulations.
The EU’s trade chief, Maros Sefcovic, was expected to speak with US Commerce Secretary Howard Lutnick on Monday. EU ambassadors were also scheduled to hold a last-minute meeting on Monday to discuss the latest developments with the commission.
US and European equity-index futures climbed along with Asian stocks on Monday. The US dollar fluctuated after falling to its lowest level since December 2023.
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Trump’s 50 per cent tariff threat would hit US$321 billion worth of US-EU goods trade, lowering US gross domestic product by close to 0.6 per cent and boosting prices by more than 0.3 per cent, according to Bloomberg Economics calculations.
After an initial exchange of papers, the US last week rejected a proposal sent by the commission, which handles trade matters on behalf of the EU’s 27 member states.
The EU had offered to jointly remove tariffs on industrial goods, to boost access for some American agricultural products and to co-develop artificial intelligence data centers, Bloomberg reported.
While the EU has said its priority is to find a negotiated solution with the US, it’s also been preparing to retaliate if necessary.
The EU has approved tariffs on 21 billion euros (S$31 billion) of US goods in response to Trump’s metals levies that can be quickly implemented. They target politically sensitive American states and include products such as soybeans from Louisiana, home to House Speaker Mike Johnson, as well as agricultural products, poultry and motorcycles.
The bloc is also preparing an additional list of tariffs on 95 billion euros of American products. Those measures, which are in response to Trump’s “reciprocal” levies and automotive duties would target industrial goods including Boeing aircraft, US-made cars and bourbon.
Some member states have been urging cool heads as the tariff deadline nears. German Economy Minister Katherina Reiche said the EU and US need “to calm down” ahead of the talks.
“We need to find common ground. That must be the goal,” Reiche said at a Handelsblatt event in Heilbronn on Monday.
At the same time, the US must understand that tariffs also hurt them, she said. “There are still six weeks left to find a solution,” said Reiche. BLOOMBERG
