At 15% US tariffs, EU says its trade still flows
BRUSSELS: United States tariffs of 15 per cent on European Union imports still allow trade to flow and the key factor is how those duties compare with other trading partners, a senior European Commission trade official said on Wednesday (Sep 3).
"There is a level ... where a tariff becomes prohibitive and trade will no longer flow, but with the 15 per cent all-inclusive that is not where we are," Sabine Weyand, director-general of the EU executive's trade division, told a European Parliament hearing.
Weyand, part of the EU team that struck a framework deal with the Trump administration in late July, urged lawmakers to support EU plans to remove its duties on US industrial products as part of the agreement.
TRADE HOLDS UP DESPITE DUTIES
Weyand said data from the second quarter showed EU-US trade had held firm, and in some sectors even increased, despite the tariff hike. The exception was car exports, which have faced a higher 27.5 per cent tariff.
"The US will not be able to produce all these products, which it has now made more expensive to import," she said, adding that EU competitiveness depended on Washington’s tariff level relative to other countries.
EU FLAT RATE DEAL
Until Aug 1, EU exports were subject to a 10 per cent tariff plus average Most Favoured Nation (MFN) duties of 4.8 per cent. Under the new deal, the EU faces a flat rate of 15 per cent with no additional MFN charges.
The EU is now the only partner with such a flat-rate tariff arrangement. Cars, previously exempt from the flat duty, will now also be included under the 15 per cent rate.
‘BEST ON OFFER’
Weyand told lawmakers the deal was preferable to the alternative, warning that Trump had previously threatened to impose 30 per cent tariffs on nearly all EU goods.
"In any negotiation, you need to look at what is the alternative. We would all wish that the alternative was that we would all trade on MFN duties as used to be the case... but that is no longer an option with the US," she said.
