The longest “conclave” in history. While Americans and Europeans have been negotiating a commercial agreement for months, the white smoke is always long to arrive.
However, in the week, European diplomats mentioned an imminent Customs Agreement with customs duties with an EU ready to sign an “agreement” with improved customs tasks of 15% (against 10% today), but the firm has not yet taken place.
Donald Trump, who thought he was being able to sign with Europe after the agreement with Japan, is now speaking in two possibilities this Friday of agreeing with the EU.
Why do you crawl in length? Because little by little in the EU Foreign Ministry, we realize the encrypted impact studies of the danger that would constitute a surcharge, even “only” 15%.
In France, Customs has just submitted a report that is the impact on the margins of the 10% surcharge companies currently in force and make an estimate in a 30% scenario (the one expected on August 1). Currently, Donald Trump’s “tariffs” are already amputating their accounts at 1.2 billion euros. With 30%, it would rise to 3.5 billion. But at 15% it would still be very high, in the order of 1.5 to 2 billion euros for the 2,000 French companies that trade with the United States.
The EU would apply the same taxes in exchange
In this context, nobody wants to hurry to sign and everyone hopes to fold the white house tenant who, as a reminder, signed a “treatment” of 10% with the United Kingdom, there are weeks of this.
Therefore, Brussels is preparing for a scenario without agreement with hope, without a doubt that the US president changes his opinion at the last minute, since it is usual.
Meanwhile, European diplomats have agreed to apply reprisals to 93 billion euros in American products If negotiations between Brussels and Washington do not lead an agreement.
They are related to soybeans, jeans, motorcycles or even Boeing aircraft and cars, in addition to thousands of other products. These reprisals would consist of returning in exchange for a 30% rate in these American products imported to Europe according to CNBC.
“In a scenario without agreement without a new postponement of US prices, I see that the EU opts for a CT scan approach, that is, impose 30% prices on certain US products, not in all products, but in some of the famous motorcycles, cars, clothing and alcohol,” said Carsten Brzeski, world manager of Macroononomics in the CNBC Antenna.
Therefore, the idea would be to embark on a “eye for the eye, tooth tooth”, but without going to excel with the highest customs prices than the taxes for the White House.
A “commercial sponsoka”
The other scenario remains, that of the “Commercial Bazooka” of which we have spoken a lot to Brussels for a few days, especially under the impetus of France that seems to have gathered Germany in its cause in the last hours.
“The position of Europe must be a negotiation position, but also a position of firmness. (…) Now we must change its method,” Industry Minister Marc Ferracci said on Tuesday, evoking the need to “trigger a certain number of response measures” against the United States in the absence of agreement.
This anti-coercion instrument (ACI) evokes without appointing it, the French minister is a legal tool that the EU has endowed at the end of 2023 but that was never used. Originally he thought of defending himself against threats of Russian or China interference in European politics. But it will not be used against the secular ally of Europeans who are Americans.
This tool would also allow the application of customs tariffs, to impose fees in several sectors, prohibit the importation of certain American products, limit the investment of US companies or even prohibit them from public procurement.
The nuclear option is considered, recalls Alberto Rizzi, research manager of the European Board of Foreign Affairs, but in reality, there is a place for maneuver in its application, provided that retaliation measures remain proportional to the damage caused by coercion. “
Otherwise, the EU cannot apply the anti-coercion measures package, but only a few to press Americans.
But as a “nuclear option”, this instrument was swing above all as a deterrent weapon that does not intend to be used. Especially not against an omnipresent economic ally in the European continent through thousands of companies, workers and billions of dollars in capital. In other words, ACI would have very significant negative consequences in European economies already weakened after years of energy price outbreak and months of commercial wars with the United States, but also in China.
“Repliations are considered as a negotiation tool of the EU, so the ACI will probably only activate in a second phase if there is no response from the United States after the entry into the force of the price packages: the EU would like to keep it as a lever instead of using it immediately,” said Alberto Rizzi.
Therefore, now there are 7 days for EU countries to weigh the portfolios and counters of these different options.
Source: BFM TV
