US, EU trade talks gain new momentum with deal with Japan

International

The United States’ trade talks with the European Union (EU) have gained renewed momentum following the recent signing of a landmark trade deal between the United States and Japan. According to European diplomats, the two sides are moving towards a deal with a base tariff rate of 15%, which would allow for tariff exemptions in certain cases.

US President Donald Trump recently announced a major trade deal with Japan, under which Japan has pledged $550 billion in investment and loans to the United States, along with a pledge to buy 100 Boeing aircraft and increase imports of US agricultural products.

Following the deal, the Trump administration is now trying to reach a deal with the EU to avoid the threat of a 30% tariff on EU goods from August 1. However, this rate could be reduced in certain sectors – such as aircraft, lumber, some pharmaceuticals and agricultural products. However, the current 50% tariff on steel is unlikely to be reduced.

While the White House has not commented on the matter, Trump’s trade adviser Peter Navarro advised caution in commenting on the European report.

The European Commission has said it is ready to take countermeasures if no deal is reached. EU member states will vote on Thursday on whether to impose 93 billion euros in retaliatory tariffs. Most countries are in favor of the preventive measures.

Industries under pressure from the Trump administration, particularly automobile and electronics manufacturers, have had mixed reactions to the Japan-U.S. deal. U.S. automakers say it would be detrimental to U.S. industry if Japan benefits from a 15% tariff while American-content cars imported from Canada and Mexico are subject to a 25% tariff.

European markets, however, responded positively to the deal, with European carmakers’ shares rising on hopes that US tariffs on EU cars could also be reduced.

Trump said, “I will only lower tariffs if the country gives us access to our market.”

Preparations are also underway for new trade talks with China, which are scheduled to take place in Stockholm next week.

This situation makes it clear that the role of the United States in global trade and the policy stance of the Trump administration are strategically redefining relations with various countries.