The European Union (EU) still expects trade relations with Washington to remain volatile, but is confident it has strong “insurance” in the form of a framework agreement that sets a maximum tariff of 15% on most of its exports to the United States, a senior EU official said.
With the new tariff rates due to take effect in a matter of days, the 27-nation bloc is still waiting for an executive order from Washington to lower tariffs on some products, including cars and spare parts, to the agreed 15%.
A senior EU official said he expected the order to be issued “in the near future”.
The EU-US deal still leaves many open questions, including tariffs on wine and spirits. Negotiations on a joint statement with the US are in the final stages, with the text almost ready, and the EU is now waiting for a formal response from Washington to finalise the deal, the official said. He declined to give a timeline for an announcement.
He added that the 15% tariff imposed on EU goods is a blanket tariff and unlike some other countries' agreements with Washington. For example, cheese from the EU is subject to a 15% tariff, but cheese from the UK will be subject to more than 24% after all rates are included.
Tariffs on pharmaceuticals and semiconductors are currently at zero, and if increased as a result of the US investigation into imports of those products, they will still not exceed the 15% ceiling.
Discussions on steel are still ongoing because they need to address volume issues, the official added.
The EU is also finalising a list of key products that will be exempt from US tariffs. The EU is working to include as many products as possible on the zero-for-zero tariff exemption list.
Meanwhile, investor sentiment in the eurozone fell sharply in August, an early sign that the business community is not very confident about the EU-US trade deal, a survey showed on Monday.
France and Germany are among the EU countries that have voiced that the bloc was too weak during trade negotiations with the US and should be more assertive in the future.
