EU and US tighten on 10%, Sefcovic flies to Washington

July 9 is now just around the corner, the time for postponements is coming to an end: the European Union and the United States are called to put a stop, at least temporarily, to the issue of duties. And the desire to close, on both sides, seems to have emerged with a certain concreteness in recent days. The EU Commissioner for Trade, Maros Sefcovic, will be in Washington on Tuesday for a new, crucial, round of talks. Once again the Slovakian will have to deal with the US Secretary of Trade, Howard Lutnick and the other chief negotiator of the American administration, Jamieson Greer. "I can only tell you that we want to get the maximum possible, something that is fair for both sides, and that can help companies in both countries to have greater predictability and clarity on how to plan their operations", explained Sefcovic.

The US counter-proposal that arrived last Thursday, just as the European Council was underway, gave a clear boost to the negotiations. And, although it was not structured in numbers and percentages, it gave solidity to one number, first of all: 10% as the basis for US duties on European products. The model is the one used by the US and Great Britain in their agreement. And it is a model that, at the beginning, the Europeans did not like at all. Over time, the positions have softened, both in the chancelleries and at the Berlaymont Palace. 10%, at this time, is considered an acceptable compromise, if supported by adequate compensation. According to Bloomberg, Brussels will ask for 10% exemptions, that is, for Washington to commit to reducing the rates on key sectors such as pharmaceuticals, alcohol, semiconductors and commercial aircraft. The blue-star negotiators are also aiming for exemptions to reduce the 25% US tariffs on cars and car parts, as well as the 50% tariff on steel and aluminum.

However, it is precisely on everything around 10% that the fragile castle of the agreement could collapse. The US, more than open to pro-EU exemptions, currently seems intent on asking for further concessions from Brussels. And they could dig their heels in on the Digital Market Act, which according to Donald Trump strikes at the heart of the Big Tech of the stars and stripes. The cancellation of the tax on digital services decided by Canada, in these hours, has not coincidentally reopened the way to negotiations with the American neighbor. "I expect taxes on digital services around the world to be eliminated, and for this to be a key element of the ongoing trade negotiations", warned the director of the National Economic Council, Kevin Hassett. Brussels, for now, seems to be holding its ground. "The sovereign decisions of the EU" on digital legislation "are not on the table". It is true, however, that the Commission's investigation into X at the time of the Digital Service Act has been postponed well beyond the expected deadline of the summer. At the same time, to soften the negotiations, the EU is ready to play the trump card of rearmament: with the new defense programs, purchases of US military equipment will certainly increase.

In the meantime, Ursula von der Leyen does not lose sight of possible plan Bs. In Seville, meeting with WTO director Ngozi Okonjo-Iweala, the Commission president reiterated what she had already communicated to the 27 at the EU Summit: the need for a reform of the organization in light of the new global trade context. And then there is China, with which there is a significant rapprochement. On Wednesday, Foreign Minister Wang Yi will land in Brussels for strategic dialogue with the EU in view of the summit at the end of July. Wang will also visit Paris and Berlin, stops on a tour in which Beijing seeks to reposition itself with Europe. There are still many pitfalls but, in the chess game with Trump, the EU and China could, surprisingly, find themselves on the same side. heavy duties on imports of steel, aluminum and cars. Canada is the main supplier of steel and aluminum to the United States.