On Thursday, the European Commission presented a proposal to remove tariffs on industrial goods from the United States (US) in retaliation for the reduction of tariffs on European Union (EU) cars in the US.
The initiative is part of a trade deal agreed between US President Donald Trump and European Commission President Ursula von der Leyen in late July to avoid a prolonged trade war between the two sides.
In return, the US has agreed to reduce tariffs on cars made in the EU from 27.5% to 15%, effective retroactively from August 1.
Although the deal is disproportionate – the EU will have to reduce its own tariffs and buy more energy from the US, while the US will maintain tariffs on 70 percent of EU exports – this is said to be better than facing the 30% tariffs that were once threatened.
The European Commission proposal also includes tariff exemptions for certain agricultural goods such as potatoes and pork, while sensitive goods such as beef and chicken are exempt from the exemptions.
The move to eliminate tariffs on industrial goods is expected to have little impact as two-thirds of existing goods are already subject to zero tariffs, with the EU's average tariff on US goods at just around 1.35%.
The proposal still needs approval from EU member states and the European Parliament, a process expected to take several weeks. Overall, the move marks a diplomatic push by the EU and US to ease trade tensions and restore stability in transatlantic economic relations.
