EU Official: 15% U.S. Tariff Not Hindering Trade

A senior trade official from the European Union (EU) stated on Wednesday that the 15% tariff imposed by the United States on EU imports has not hindered trade between the two regions. The official emphasized that the key factor is not the tariff rate itself, but rather the comparative tariff levels between the EU and other competitors.

During a hearing at the European Parliament, the Director-General for Trade at the EU's executive body, Sabine Weyand, noted that there is a "threshold" at which tariffs become high enough to create trade barriers and disrupt trade. However, the current 15% "blanket" tariff imposed by the U.S. on EU goods has not reached this level.

Weyand, who was part of the EU negotiation team that reached a framework agreement with the Trump administration at the end of July, advised EU lawmakers to vote in favor of an EU plan to cancel tariffs on U.S. industrial products. This move would fulfill the EU's commitments under the agreement.

Data from the second quarter of this year showed that transatlantic trade between the EU and the U.S. remained stable, with some sectors even seeing an increase in trade volume. The only exception was the automotive sector, which faces a 27.5% tariff.

The official highlighted that the U.S. cannot produce all the goods it imports, and the cost of these imported goods has increased due to the tariffs. The EU's competitiveness, according to Weyand, depends on the tariff levels set by the U.S. on EU goods compared to those set on goods from other countries.

Prior to August 1, the U.S. imposed a 10% tariff on EU imports, in addition to the existing average 4.8% most-favored-nation tariff. Now, the EU, comprising 27 member states, is the only trading partner of the U.S. that faces a "uniform tariff rate" of 15% without additional most-favored-nation tariffs. According to the new agreement, this 15% tariff will also apply to EU cars exported to the U.S.

Weyand informed lawmakers that this agreement is the best outcome achievable at present, given that the Trump administration had previously threatened to impose a 30% tariff on EU goods. She also noted that in any negotiation, one must consider the "alternative" scenario. While all parties hope for a return to most-favored-nation tariff levels, this option is no longer viable for the U.S.