On Thursday (February 21), EU Trade Commissioner Sefcovic stated that in trade negotiations with the Trump administration in the United States, both sides have shown a willingness to mutually reduce tariffs and plan to focus on the automotive industry. The primary goal of this negotiation is to avoid unilateral tariffs imposed by the United States and countermeasures taken by the European Union, thereby reducing economic losses for both sides.

Negotiation background and objectives

Sevkovic had a four hour meeting with senior US trade officials in Washington on Wednesday. He stated after the meeting that the EU intends to purchase more liquefied natural gas from the United States and noted that the US has shown some willingness to reduce tariffs on each other. He emphasized that the core of the negotiations is to avoid a "painful period", where both sides impose tariffs on each other before returning to the negotiating table.

Sefkovic discussed plans with the US to avoid unilateral tariffs imposed by the Trump administration. Last week, Trump announced a reciprocal tariff plan aimed at raising US import tariffs to the same level as other countries, which could have a serious impact on the European Union. At present, the European Union imposes a 10% tariff on passenger cars, which is four times the 2.5% tariff imposed by the United States, while US officials complain that Europe's value-added tax is at least 17.5%.

Current situation and differences in tariffs

Sevkovic pointed out that the overall tariff of the United States on the European Union is about 1.4%, while the overall tariff of the European Union on American goods is 0.9%, and 70% of goods arriving in Europe are duty-free. However, there are still significant differences between the two sides on the issue of tariffs in the automotive industry. The European Union is dissatisfied with the high 25% tariff imposed by the United States on pickup trucks, which originated from the US European trade dispute in the 1960s and restricted non North American imported cars from entering the most profitable segment of the US automotive market.

Trade deficit and service industry surplus

Sevkovic stated that although the United States has a trade deficit in goods, American companies have a "considerable surplus" in the service sector, mainly driven by American technology companies. After offsetting the two, the trade deficit between the United States and Europe is about 50 billion euros (52.35 billion US dollars), accounting for only 3% of the overall trade level. He emphasized, "This is not a problem that we cannot overcome

Liquefied natural gas cooperation

Sevkovic also mentioned that as Europe gradually reduces its dependence on Russian liquefied natural gas, the EU intends to increase its procurement of liquefied natural gas from the United States. However, he did not disclose specific details.

Future focus: Automotive industry

Sevkovic stated that the automotive industry is a priority topic in current negotiations, and both sides will explore how to reduce and ultimately eliminate tariffs, while promoting mutual recognition of standards. The progress in this field may bring breakthrough progress to the US European trade relationship.

Analysis of the Impact on the Euro

The progress of US European trade negotiations may have a short-term impact on the euro. If both sides reach an agreement to reduce tariffs, especially in the automotive industry, it will help alleviate market concerns about the trade war, boost confidence in the eurozone economy, and thus support the euro. However, if negotiations reach a deadlock or the United States unilaterally imposes tariffs, the euro may face downward pressure. In addition, the EU's increased procurement of liquefied natural gas from the United States may also affect the trade balance of the eurozone, thereby having a certain impact on the euro exchange rate.

summary

The trade negotiations between the United States and Europe are underway in a probe to reduce tariffs, with the automotive industry becoming the focus of the game between the two sides. Despite differences on tariffs and trade deficits, both sides have shown a willingness to resolve the issue through dialogue. As negotiations deepen, cooperation on liquefied natural gas and automobile tariffs may become key factors driving forward the development of US European trade relations.