The United States has put forward a proposal under which a flat 10% tariff will apply to a broad range of imports, but Brussels authorities are worried about implications for key industries, said people familiar with talks.
The proposal, which has been advanced as one of a number of initiatives under current trade negotiations that are looking to rebalance international trade flows and reduce dependence on certain markets, has drawn mixed responses in the EU. While some member states see the flat-rate tariff as one that will streamline trade links and protect domestic industries, others are concerned that it will adversely affect certain industries such as automotive, agriculture, and high-tech.
EU Trade Commissioner Elena Kovács acknowledged that there are ongoing negotiations but stressed that any conclusion would involve “a careful analysis of sectoral exposure and long-term competitiveness.”
Washington has advocated for a blanket 10% tariff that will create a fair playing ground and reduce trade deficits, especially China, diplomatic sources have indicated. But EU officials are, however, demanding guarantees that sector-sensitive industries will not be affected by unintended consequences.
“We have no issue with fair changes in trade, but across-the-board measures can have unforeseen distortions,” said a senior EU diplomat. “Our issue is a balanced outcome that supports European innovation and work.”
Industry groups have also raised alarm, warning a uniform tariff could increase costs for EU producers that rely on global supply chains.
Its proposal remains under consideration, and further discussion will take place at future EU-U.S. economic consultations later this month.
