The European Union has announced a 90-day pause on trade retaliation measures against the US, following President Donald Trump’s decision to halt his sweeping new tariffs. The move gives both sides an opportunity to work towards a mutually beneficial agreement and resolve the ongoing trade tensions.
The European Commission has announced that it will put trade retaliation measures on hold for 90 days, matching President Donald Trump‘s pause on his sweeping new tariffs. This decision comes after Trump imposed a 20% levy on goods from the EU as part of his onslaught of tariffs against global trading partners.
The tensions between the US and the EU began in March when Trump imposed 25% tariffs on imported steel and aluminum, prompting a response from the EU. The EU member countries voted to approve a set of retaliatory tariffs on $23 billion in goods, which were set to go into effect in stages.
The US-EU trade war refers to the ongoing tensions between the United States and European Union regarding trade policies.
The dispute began in 2018, with the US imposing tariffs on EU steel and aluminum imports.
The EU responded by introducing retaliatory measures, including tariffs on iconic American products like bourbon and jeans.
The conflict has resulted in significant economic losses for both parties, with the IMF estimating a $1 billion annual loss due to trade restrictions.
Key factors driving the dispute include differing views on globalization, protectionism, and fair trade practices.
European Commission President Ursula von der Leyen said that the commission took note of Trump‘s announcement and wants to give negotiations a chance. However, she warned that if negotiations are not satisfactory, countermeasures will kick in. The EU tariffs were set to target smaller lists of goods, but with the pause in place, they will now face Trump‘s 10% baseline tariff.
The targeted goods represent a tiny fraction of the $1.8 trillion in US-EU annual trade. The EU and the US have the largest trading relationship in the world, with over 4.4 billion euros worth of goods and services crossing the Atlantic each day. Despite the tensions, both sides have expressed a preference for a negotiated deal to resolve the trade war.
The United States and the European Union have been engaged in trade negotiations for decades.
The goal is to create a more balanced and reciprocal trade relationship between the two economic powerhouses.
Key issues include tariffs, regulatory differences, and access to each other's markets.
According to the Office of the US Trade Representative, bilateral trade between the US and EU totals over $1 trillion annually.
A negotiated deal aims to reduce barriers, increase exports, and promote economic growth.
Von der Leyen emphasized that the EU intends to diversify its trade partnerships and lift barriers to commerce inside its own single market. She said that Europe will continue to engage with countries accounting for 87% of global trade and share its commitment to a free and open exchange of goods, services, and ideas.
The pause in trade retaliation gives both sides an opportunity to work towards a mutually beneficial agreement. Von der Leyen‘s statement suggests that Europe is committed to cooperation and finding solutions to the trade disputes. As she said, ‘Together, Europeans will emerge stronger from this crisis.‘
The European Union (EU) is built on the principles of cooperation and solidarity among its member states.
This commitment to cooperation is enshrined in the EU's founding treaties, with Article 1 of the Treaty on European Union stating that 'the peoples of Europe... are determined to promote, through common action, peace and prosperity for their future generations.'
The EU's institutions, such as the European Commission and the Council of the European Union, facilitate cooperation among member states in areas like economic policy, justice, and home affairs.
Cooperation is also fostered through various programs and initiatives, including the Erasmus program for student exchange and the Horizon 2020 research framework.
