One of the most entrenched issues during the current legislature in the European Parliament. Its ratification was postponed week after week until MEPs decided to conclude its processing, not without first suffering new threats from the White House, which this very week hinted that Europeans would lose their access to North American liquefied natural gas if they did not greenlight the tariff agreement reached between the community president, Ursula von der Leyen, and her American counterpart, Donald Trump.
This dossier has served as a thermometer in the community institutions, as the relationship between both powers was experiencing new scenarios, rarely imagined in Brussels. Initially, it was the republican's questioning of the sovereignty of the autonomous Danish island of Greenland.
The fact that a historical ally floated the idea of annexing a territory of the bloc for military interests, outside of NATO, set off all alarms in the European capital. The opening of that crisis in January froze the approval process of the text that includes the “zero tariffs” for Americans in the European Parliament until today.
Tariffs, tensions and legal crisis
It was not only the leader's insinuations of taking over the island that made swords rise in Strasbourg, but also the will to apply new tariffs to those countries like France or Germany that decided to militarily support the autonomous island during the days the crisis lasted in the face of possible American interferences.
After this event came the ruling of the United States Supreme Court, which questioned the legality of the application of these tariffs by not having the approval of the American Congress and branded it as “overreach of powers”, which further complicated the process.
The negotiating delegations, both in the Council and in the Parliament and the Commission, then assured that the legal basis on which the house of cards that was the agreement had been built had disappeared. Once again, the key was not only there, but in the fact that Trump once again made a new swerve by proposing a generic tariff for all countries.
Despite these comings and goings of the White House, as well as the inherent instability of the link between the United States and the European Union, diplomatic sources urged to accelerate the approval process to set an example of “predictability” to the rest of the partners.
“Predictability” was precisely the demand of the Community Executive to its American partners given the fear of investors and companies due to the generated situation. “Full respect for the agreement between the United States and the European Union is paramount”, repeated the Community Trade chief, Maroš Šefčovič, on every occasion when he was questioned.
The new conditions
The MEPs have taken advantage of these delays and situations to introduce new suspension clauses. “Any tariff imposed on the European Union or one of its Member States due to its foreign policy decisions is unacceptable,” declared the chairman of the Committee on Trade, Bernd Lange.
For this reason, they pointed out in Strasbourg that, in the event that new tariffs were applied, the legislative work implementing tariff preferences on American products would be suspended: “tariff threats against one of us are a threat against all of us”.
Another clause will accompany the agreement. The one known as “dawn clause” will link the deployment of the agreed commercial preferences to the effective respect of the commitments by the Americans.
In addition, the condition has also been introduced that, before this regulation enters into force, there be the reduction on EU products containing less than 50% steel or aluminum, from 50% to 15%.
“It is also clear that if the United States decides to increase the current Section 122 tariffs from 10% to 15% across the board, most EU products would be subject to an effective tariff higher than the 15% ceiling due to the addition of the Most Favored Nation tariff. This would also be unacceptable and would lead to the suspension of our work on the files”, Lange added.
A key vote to relaunch cooperation
In the European Parliament, they are now conveying the idea that, with Thursday's vote, a “positive dynamic of commercial cooperation” is launched where mutual interests converge. Tariff threats disappear and companies can plan ahead “to increase our shared prosperity and affordability,” negotiators state.
For the implementation of the agreement, which was signed in Scotland, the Commission presented a law that referred to the elimination of tariffs on American industrial products and to granting preferential market access for a range of seafood and non-sensitive agricultural products from the United States.
This rule was accompanied by a second one that proposed to extend the tariff exemption for lobster, which now includes processed lobster, thus expanding the scope of the initial agreement.
Conditions, energy and final pressure of Washington
It had to be Parliament that approved both proposals for them to come into effect. As agreed, once said tariff reductions began to operate, the United States will lower tariffs imposed on the 27 from 27.5% to 15%.
“It is in our mutual interest that both parties fulfill their commitments and guarantee the full implementation of the agreement,” declared the Commissioner for Trade, Maroš Šefčovič.
A vote that has come after the United States ambassador to the European Union, Andrew Puzder, warned that Europeans ran the risk of losing "favorable" access to liquefied natural gas contracts if this approval did not occur "without modifications or amendments".
Puzder stressed that any change could affect the terms of energy contracts and other American products, including oil and civil nuclear technology.
The energy background
The latest threat from the United States came at a time when energy markets are strained by the war in Iran and the crisis in the Gulf. The European Commission asked the 27 member states to increase gas reserves and accelerate the transition towards renewable energies and energy storage, with the aim of reducing dependence on fossil fuels and improving supply security.
“The recent spikes in the prices of imported fossil fuels demonstrate that the energy transition remains the most effective strategy to achieve Europe's strategic autonomy”, noted the last European Council.