The European Union has been granted six weeks of extra respite from US President Donald Trump's higher trade tariffs by Commission President Ursula von der Leyen. A gain on paper, but in practice few companies will use this period until 9 July to quickly do some extra business.
This is the assessment of organizations that represent the agro and trade interests in Brussels. "President Trump is a moving target. We dare not give advice on what he will or will not do in the coming weeks," says a representative of one of these organizations.
The fact is that Trump has already backtracked on his announcements to the EU several times. On April 2, Trump first announced high import tariffs for imports from China in particular, but also for European products, on average around 20%, but sometimes higher. A few hours later, he lowered the tariff for the EU, among others, to an additional 10%.
Since then, negotiations have been ongoing with the EU, among others, on a more balanced trade balance. The EU would have to import more from the US, otherwise Trump would still significantly increase the tariffs for the EU. These negotiations did not seem to open very smoothly, but Trump had also granted a 90-day grace period. Last week, well before the end of the 90-day period, the American president suddenly announced 50% import tariffs for European products. A telephone consultation with EC President Von der Leyen made a postponement possible again. For the time being, until the end of the already known 90-day period.
Certainty is gone
The question is whether this will yield much. The EU could, in the case of agriculture, start buying extra soy to straighten out the trade balance, or extra butter, because that product is currently very cheap in the US, but who says that this will help or knows how long the favourable tariff window will remain open. If President Trump loses patience again and there are shipments of American product on its way to the EU, the European Commission will probably not wait with countermeasures until these products have arrived in the EU.
According to research, the European trade surplus with the US is mainly caused by exports of medicines and at some distance cars and machines. Products from agriculture play hardly any role, although this can have a very different impact on individual companies. In the area of services (software and the like) the US has a surplus, but services do not seem to be part of the negotiations at the moment.