EU Sends Top Representative to US: Last-Minute Tariff Talks Begin!

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The European Union’s trade chief, Maros Sefcovic, left for Washington on Wednesday for tariff talks, an EU spokesman said. He is scheduled to meet US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.


President Donald Trump has threatened to impose a 30% tariff on EU imports from August 1, a level that Europe considers unacceptable and would end normal trade relations between the world’s two largest markets.


ASML, the world’s largest supplier of computer chip-making equipment, warned that uncertainty in tariff talks is prompting US chip companies to delay investments, hurting the company’s annual outlook. ASML shares fell as much as 7.3% in early trading.


“Trump’s tariffs are just a defeat for all parties,” German Finance Minister Lars Klingbeil told a news conference, saying the tariffs threaten the US economy as much as Europe’s.


The European Commission, which handles trade on behalf of the EU, is prepared to impose retaliatory tariffs on €72 billion ($83.6 billion) worth of US goods including Boeing planes, bourbon whiskey and vehicles if trade talks with Washington fail.


The list of countermeasures, sent to EU member states, was prepared before Trump stepped up pressure on the 27-nation bloc over the weekend. It is in response to US tariffs on cars, spare parts and a 10% base tariff.


The package of countermeasures also covers chemicals, medical devices, electrical and precision equipment as well as agricultural and food products including a wide range of fruits and vegetables, as well as wine, beer and spirits worth €6.35 billion.


European companies are expected to report a 0.7% drop in revenue and a 3% drop in revenue in the upcoming second-quarter earnings season, the weakest in more than a year.


European auto stocks, including Germany's Volkswagen, also fell after Renault issued a profit warning late on Tuesday, stoking concerns about the health of the auto industry hit by a 25% US import tariff.


According to Confindustria President Emanuele Orsini, the only acceptable tariff rate for EU exports to the US is zero, given that the bloc is already suffering from an unfavourable exchange rate.


“The real issue is that not only are we bearing the burden of tariffs, but the euro’s strengthening against the US dollar is also adding to the pressure,” Orsini said.


The euro has appreciated more than 12% against the US dollar since the start of the year.


The August 1 deadline gives the affected countries time to negotiate tariff reductions. Some economists have also noted that Trump has repeatedly backed down on his tariff threats.