The European Commission announced Aug. 4 that it would delay for a period of six months a package of retaliatory tariffs targeting €93 billion worth of U.S. imports that was scheduled to enter into force Aug. 7. At the same time, a EU spokesperson said the EU is continuing to work with the U.S. on a joint statement formalizing their recently announced bilateral trade agreement.
As previously reported, the U.S. and the EU announced last week a “Cooperation Agreement on Reciprocal, Fair, and Balanced Trade”, which the White House called “a generational modernization of the transatlantic alliance.” However, no official documents have yet been released regarding this agreement and the two sides have offered occasionally conflicting accounts of what will be included. What is known for certain is that, as of Aug. 7 in the case of EU originating products subject to the reciprocal tariffs, goods with a Column 1 duty rate of 15 percent or higher will only be subject to the applicable Column 1 rate, while goods with a Column 1 duty rate of less than 15 percent will face a single 15 percent rate.
According to the European Commission, the trade deal with the U.S. includes various other tariff commitments, including applying the 15 percent tariff ceiling to automobiles and auto parts. Those products are currently subject to a Section 232 tariff of 25 percent, together with the regular Column 1 duty rate, and the U.S. – at least as of noon Aug. 5 – had not taken action to modify those tariffs. For his part, President Trump reiterated Aug. 5 that he will impose a 35 percent tariff on EU products if the EU does not follow through with a commitment to invest $600 billion in the U.S. over the next three years, even though the EU has said any decision on those investments would be made by the EU private sector.
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