EU considers reducing tariffs on US imports to gain favor with Trump - WSJ.

EU considers reducing tariffs on US imports to gain favor with Trump - WSJ.

The European Union (EU) is considering reducing tariffs on US imports as a strategic move to gain favor with the Trump administration, according to recent reports. The EU's industry chief, Stephane Sejourne, has stated that the bloc will need to "rebalance" in key sectors if the US insists on keeping tariffs at their current level [2].

The EU's decision comes amidst ongoing trade negotiations with the US, which have seen fits and starts. The EU is racing to reach a deal before July 9, when duties on nearly all its exports to the US could jump to 50% [2]. The EU has threatened to retaliate with tariffs on US goods, including Boeing (BA) planes, if the US sticks with its baseline 10% tariffs [2].

Meanwhile, the US economy is still grappling with the effects of the tariffs. Federal Reserve Chair Jerome Powell has reiterated that the central bank is waiting to see the effects of the tariffs on prices before cutting interest rates [1]. The US has already implemented tariffs on washing machines, fridges, and ovens, which could lead to higher prices for these everyday items [1].

The EU's move to reduce tariffs on US imports is part of a broader strategy to avoid a trade standoff with the US. The EU is pushing for a fair deal that adheres to World Trade Organization (WTO) standards, while the US has demanded quotas on fish and one-sided tariff rules [2]. The EU's trade chief, Maros Sefcovic, has confirmed that rebalancing measures are being prepared to shield European firms if no fair outcome is reached [2].

The EU's consideration of reducing tariffs on US imports is a significant development in the ongoing trade negotiations between the two economic powers. The outcome of these negotiations could have far-reaching implications for global trade and the economies of both the EU and the US.

References:
[1] https://finance.yahoo.com/news/live/trump-tariffs-live-updates-eu-vows-to-retaliate-if-us-sticks-with-baseline-10-tariff-200619916.html
[2] https://sg.finance.yahoo.com/news/trump-tariffs-live-updates-eu-vows-to-retaliate-if-us-sticks-with-baseline-10-tariff-200619916.html