After the latest tariff ultimatum from the President of the United States, Donald Trump, to apply a 25% tariff on European cars, the European Commission's trade chief, Maroš Šefčovič, met this Tuesday with his US counterpart, Jamieson Greer, with the aim of reducing tension between the two powers and avoiding an escalation that could lead to a wider trade conflict.
After a meeting of just over an hour, in which the details of the tariff agreement reached by the negotiating teams in July in Scotland would have been addressed, Brussels maintains the intention of completing the processing of the legislative file relating to this matter before the first anniversary of the signing. That is to say, in the next two months, a demanding schedule that forces the acceleration of technical and political work in parallel.
Race-against-time negotiations
“It would be beneficial for the main aspects of the agreement to be in force before its first anniversary,” states an official from the Community Executive familiar with these discussions, underlining the urgency that prevails in European institutions. In this context, the pressure is not only due to a matter of deadlines, but also to the need to offer certainty to the markets and to the most exposed industrial sectors, especially the automotive industry.
“It is useful and important to maintain frequent dialogue to clarify each party’s position in the agreement implementation process,” they point out from the EU executive. Next Wednesday, the co-legislators of the European institutions will once again sit at the trilogue table to try to reach an agreement as soon as possible, respecting the prerogatives of each institution involved in the legislative process.
In that negotiation, the European Parliament would be pushing to introduce a safeguard clause in the agreement. This would allow the European Union to end the trade benefits granted to Washington in case the White House were to threaten its companies and producers again. It is a defensive tool that seeks to avoid situations of vulnerability in the face of unilateral decisions.
Brussels toughens its tone
Until final approval is obtained from the Council, the Commission and Parliament, both parties would have agreed to “intensify dialogue at both political and technical levels, as well as more firmly promote a positive agenda,” which includes risk reduction measures and the protection of steel reserves, a particularly sensitive sector in transatlantic trade relations.
“The work continues and the Commission will continue to strive for progress on all key fronts,” they maintain confidently in Brussels. However, the conciliatory tone of the technical teams contrasts with the firmer statements of the President of the European Commission, Ursula von der Leyen, who reminded the US leader during the first bilateral summit between the EU and Armenia that “an agreement is an agreement”, in a clear warning about the need to respect the commitments made.
The highest community leader has wanted to emphasize that the European Union is in the “final stage” of the implementation of tariff commitments, but has made it clear that the Twenty-Seven are prepared for “any scenario.” This statement is not minor: it implies that Brussels contemplates the possibility of a partial or total rupture of the pact if Washington finally decides to apply the 25% levy on European automobiles.
For his part, the President of the European Council, António Costa, has shown his support for Von der Leyen's position and has assured that the Heads of State and Government of the Twenty-Seven fully support “the work of the European Commission and its president” in this negotiation with Washington. This political support reinforces Brussels' negotiating position at a key moment.
From the European Commission they firmly underline that certainty and a stable regulatory framework are indispensable assets for the business fabric of the old continent. In this sense, Šefčovič takes advantage of every public intervention to emphasize that full compliance with the agreements signed between Washington and Brussels is an absolute priority.
The concern in Brussels is not only political, but also economic. An open trade war could seriously affect strategic sectors, from automotive to the steel industry, including agri-food. Furthermore, in a global context marked by geopolitical fragmentation and trade tensions, the EU seeks to consolidate itself as a space of stability and predictability.
Spain, between public discourse and internal reality
For its part, the Government of Spain maintains a double discourse. While for public consumption the Executive rejects tariffs by considering them a harmful commercial tool that generates instability for economic agents, the sentiment in the offices is more nuanced.
Sources from the economic area of Moncloa did not hide their satisfaction after the approval by the European Parliament, as they consider that, faced with the volatility of US decisions, the European Union is managing to position itself as a benchmark for legal certainty. This perception is key to attracting investments and reinforcing market confidence.
“Any breach of this agreement —the European Commission has also said so— would imply that we would reserve the capacity to respond with the instruments and tools at our disposal,” stated the First Vice-President, Carlos Cuerpo, upon his arrival at the meeting with the Economy and Finance ministers of the eurozone.
This complex legislative process reflects the tensions that mark the current pulse between both powers. It should be recalled that the processing suffered its first blockage when the United States threatened a large-scale tariff offensive, as direct retaliation for the military support that several European partners provided to Greenland at a time of maximum diplomatic friction. That episode, which many interpreted as a threat of trade war, set off all alarms in European institutions and accelerated efforts to shield the agreement. Since then, each step in the negotiation has been conditioned by mutual distrust and the need to avoid new crises.
The technical keys of the agreement
As a response to the pact reached in July, the Commission presented two legislative proposals to pave the way for its implementation. On the one hand, a first law that contemplated the elimination of tariffs on US industrial products, as well as preferential access to the European market for certain seafood and non-sensitive agricultural products from the United States.
The second proposal suggested extending the tariff exemption for lobster, also including processed lobster, which broadened the scope of the initial agreement. Although it may seem like a minor detail, these types of sectoral concessions are usually key to unlocking larger-scale trade negotiations.
The European Parliament had to approve both proposals for the trilogue process to begin. As agreed, once these tariff reductions came into effect, the United States would lower tariffs imposed on European products from 27.5% to 15%.
“It is mutually in our interest that both sides fulfill their commitments and guarantee the full application of the agreement,” Šefčovič declared on another occasion, insisting on the idea that transatlantic cooperation remains a fundamental pillar of international trade, despite current tensions. The next two months will be decisive in determining whether both powers manage to consolidate the agreement or if, on the contrary, a new chapter of trade tensions opens that could have far-reaching consequences for the global economy.