The European Commission demanded on Sunday that the United States stick to the terms of an EU-U.S. trade deal reached last year, after the U.S. Supreme Court struck down Donald Trump's global tariffs and he responded with new levies across the board.
The Commission, which negotiates trade policy on behalf of the 27 EU member states, said Washington must provide "full clarity" on the steps it intends to take following the court ruling.
After the court struck down Trump's global tariffs on Friday, the U.S. president announced temporary, across-the-board tariffs of 10%, which he then hiked to 15% a day later.
"The current situation is not conducive to delivering 'fair, balanced, and mutually beneficial' transatlantic trade and investment, as agreed to by both sides" in the joint statement setting out the terms of last year's trade agreement, the Commission said. "A deal is a deal."
The comments were far more strongly worded than the Commission's initial response on Friday, which had said only that it was studying the outcome of the Supreme Court decision and keeping in contact with the U.S. administration.
Last year's trade deal set a 15% U.S. tariff rate for most EU goods, apart from those covered by other sectoral tariffs such as on steel. It also allowed zero tariffs on some products such as aircraft and spare parts. The EU agreed to remove import duties on many U.S. goods and withdrew a threat to retaliate with higher levies.
It is not clear whether Trump's new 15% tariffs supersede the EU-U.S. deal. If they do, the EU's zero tariff exemptions could disappear. The new tariffs could also be placed on top of pre-existing 'most-favoured-nation' U.S. duties, which is not the case under the EU-U.S. deal.
Furthermore, the comparative advantage the EU had with a 15% tariff would appear to have disappeared as even countries without a deal face that rate. Trade policy monitor Global Trade Alert estimates that the EU as a whole will be 0.8 percentage points worse off, with Italy facing an extra 1.7 percentage points of U.S. tariffs.
Trade policy monitor Global Trade Alert estimates that the EU as a whole will be 0.8 percentage points worse off, with Italy facing an extra 1.7 percentage points of U.S. tariffs.
"In particular, EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed," the EU executive said, adding that unpredictable tariffs were disruptive and undermined confidence across global markets.
It said that EU Trade Commissioner Maros Sefcovic had discussed the issue with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick on Saturday.
