EU unveils trade offer to ease tensions with Trump's tariffs
The European Union plans to present the U.S. next week with a document outlining a package of proposals aimed at initiating trade negotiations with the Trump administration, Bloomberg News reported on Wednesday, citing people familiar with the matter.
The document will propose reducing trade and non-tariff barriers, increasing European investment in the U.S., and cooperating on global challenges such as addressing China’s steel surplus. It will also suggest purchasing American goods, liquefied natural gas, and technology, Bloomberg News reports.
In mid-April, the European Union decided to suspend retaliatory EU tariffs on the United States for 90 days. The EU was supposed to respond to the tariffs imposed by Trump on steel and aluminum. Although these tariffs remain in effect, the Union refrained from retaliation to "give negotiations a chance."
Let’s recall that EU tariffs cover American goods whose imports in 2024 amounted to over 21 billion euros (23,7 billion dollars)—just a fraction of the value of goods brought from the EU to the U.S. that were to be subject to Trump’s tariffs. The EU suspension will remain in effect until July 14.
Tariffs shook the economy
Tariffs imposed by Donald Trump—much higher than expected—shook markets, disrupted the international trade system, introduced significant uncertainty, and undermined his ratings. Despite this, the U.S. president assures that it is not over yet.
According to an analysis by The Budget Lab at Yale University, the average effective tariff rate for goods imported into the U.S. increased from 2 to 28 percent, marking the highest level since 1901 and by far the highest among all developed countries. Researchers estimate that due to changes in consumer behavior (and a radical reduction in imports from China), the ultimate average tariff level will decrease to a still high level of 18 percent. The analysis predicts that these tariffs will bring 2.4 trillion dollars to the budget over 10 years but will increase price levels by almost 3 percent and GDP per capita by nearly 5,000 dollars.
According to Professor Kenneth Reinert, an international trade specialist at George Mason University in Virginia, Trump’s tariffs are "extreme" and harmful to both the American and global economy, constituting a significant blow to the post-war international trade system created by the U.S.
