Brussels (Belgium) (AFP) – The US and EU released details of a trade deal Thursday that foresees lower car tariffs but no relief for Europe’s wine sector. Brussels stated it would push for further concessions. US President Donald Trump and EU Commission President Ursula von der Leyen clinched a framework accord in July, establishing that most EU exports would face a 15-percent US levy. However, many aspects remained unclear, as the EU sought to win carve-outs for some sectors while Trump threatened higher tariffs on others.
A joint statement issued Thursday brought some clarity to the situation, although negotiations are still ongoing and some moving parts remain. The “maximum, all-inclusive” 15-percent rate would apply to the vast majority of European exports, including cars, pharmaceuticals, semiconductors, and lumber. EU trade commissioner Maros Sefcovic told journalists in Brussels that this is “the most favorable trade deal the US has extended to any partner,” explaining that the levy will not come on top of existing tariffs.
In recent weeks, Trump had raised the possibility of additional tariffs hitting certain sectors such as pharmaceuticals, which account for 20 percent of the EU’s exports to the United States, and semiconductors. Sefcovic expressed confidence that the new rate for cars, which is lower than the current 27.5 percent, will apply retroactively from August 1. He has received assurances on this matter from his US counterpart. However, this will only happen once the EU introduces legislation to eliminate its own tariffs on US industrial products, something Sefcovic stated the commission was “working very hard” on.
Welcoming the clarity provided by the joint statement, Sigrid de Vries, director of the European auto lobby ACEA, urged the commission to implement its part of the deal “without delay,” mitigating the tariff impact that has already cost automakers millions of euros in duties every day.
– Wine woes –
The 15-percent rate will also apply to wine and spirits, despite a push by France, Italy, and other wine-making countries to win a zero tariff exemption. “Unfortunately, here we didn’t succeed,” Sefcovic said, adding that negotiations would continue, though he did not want to give “false promises.” “These doors are not closed forever,” he remarked. The French wine exporters federation expressed it was “hugely disappointed.” Gabriel Picard, the head of the wine and spirits federation FEVS, stated, “We are certain that this will create major difficulties for the wines and spirits sector.”
France exports 25 percent of its wines and spirits to the United States, and Agriculture Minister Annie Genevard emphasized that “the situation cannot remain unresolved.” In a post on X, she called the agreement “unbalanced” and stated that European negotiators needed to make this issue a priority as a matter of urgency. She also anticipated “strong European measures to support producers.” Christophe Chateau, a spokesman for a group representing Bordeaux wine producers, described the situation as “bad news” while acknowledging it was better than the worst-case scenario, as Trump had threatened tariffs as high as 200 percent at one point. He noted, “It further hinders the trade and export of Bordeaux wines to the United States,” the largest market for these products.
The US Distilled Spirits Council, a trade group, also expressed disappointment, advocating for tariff-free trade on both sides of the Atlantic. Chris Swonger, the group’s CEO, stated, “These new higher tariffs on EU spirits products will further compound the challenges facing restaurants and bars nationwide.”
– Bisons and planes –
French trade minister Laurent Saint-Martin announced that his government would seek “additional exemptions” in the trade deal. The office of Italian Prime Minister Giorgia Meloni stated that the agreement was “not yet an ideal or final point,” but noted that a “trade war” had been avoided. Under the agreement, the EU committed to significantly improving market access for a range of US seafood and agricultural goods, including tree nuts, dairy products, fruits, vegetables, pork, and bison meat.
Conversely, a special, more favorable regime will apply as of September 1 for a number of EU exports to the United States, including “unavailable natural resources” such as cork, all aircraft and aircraft parts, and generic pharmaceuticals. These products would effectively face a “zero or close to zero” rate, according to the commission’s statement. Ursula von der Leyen, the commission chief, said, “Faced with a challenging situation, we have delivered for our Member States and industry, and restored clarity and coherence to transatlantic trade. This is not the end of the process; we continue to engage with the US to agree on more tariff reductions, identify more areas of cooperation, and create more economic growth potential.”
© 2024 AFP
