EU Minister Opposes 10% US Tariff on Exports Ahead of July 9 Deadline

France’s Industry and Energy Minister Marc Ferracci has expressed strong opposition to a proposed 10% tariff on European exports to the US, labeling it an unfavorable agreement for the European Union. This stance comes as the EU faces a critical deadline of July 9 to finalize a trade deal with the US, or risk facing a significant increase in tariffs on nearly all its exports to the US, which could jump to 50%.

Ferracci, speaking at the Rencontres Economiques conference in Aix-en-Provence, emphasized that a 10% tariff would be unfair and detrimental to the EU. He urged for a united front and called for renewed dialogue with the US to address the issue effectively. The minister highlighted the importance of considering how tariffs impact value chains, using the aeronautics industry as an example where highly integrated value chains exist without tariffs. He warned that imposing a 10% tariff on this sector would be disastrous.

The EU is pushing for reductions in US tariffs on key sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft, aiming for rates lower than the proposed 10%. Additionally, Brussels is advocating for quotas and exemptions to mitigate the US’s 25% tariff on motor vehicles and car parts, as well as its 50% tariff on steel and aluminum.

The European Commission, which handles trade negotiations on behalf of the EU, views the potential trade deal as slightly more beneficial for the US. However, it is willing to accept the deal as a necessary compromise. A commission spokesperson confirmed ongoing negotiations in Washington, with European Commissioner for Trade and Economic Security Maros Sefcovic set to join the talks next week. The Commission remains committed to finding a mutually beneficial solution and is prepared to explore all options if a satisfactory agreement cannot be reached.

Optimism surrounds the possibility of a trade agreement between the EU and the US, with analysts and investors expressing confidence in the negotiations. The long-standing trade relationship between the two regions, particularly in sectors like automobiles and steel, underscores the importance of reaching a deal. The EU and the US are optimistic about the potential for an interim agreement by July 9, which would address tariff and non-tariff barriers, as well as purchases of major American goods and areas for future cooperation.