EU Proposes Elimination of All Industrial Tariffs to Trump

European Commission President Ursula von der Leyen announced on Monday that the EU has proposed a “zero-for-zero” tariff initiative to the United States, aiming to prevent a retaliatory trade conflict. “We have offered to eliminate tariffs on industrial goods, as we have successfully done with various other trading partners. Europe is always open to a beneficial agreement, and this proposal remains on the table,” she stated at a press conference alongside Norwegian Prime Minister Jonas Gahr Støre.

A decade ago, discussions surrounding the Transatlantic Trade and Investment Partnership (TTIP) nearly resulted in the removal of industrial tariffs, but those talks were ultimately derailed during Trump’s first term.

At the time, the elimination of tariffs on industrial items like cars and chemicals was not particularly contentious; however, issues related to agricultural products and safety regulations were more contentious. von der Leyen’s renewed proposal follows Trump’s recent decision to impose 20 percent tariffs on the EU and several other trading partners, raising U.S. trade barriers to their highest levels in over a century.

Trump’s trade policies have resulted in significant investor unease, with global financial markets experiencing substantial losses, totaling trillions of dollars or euros. European stocks faced their largest single-day declines since the onset of the Covid pandemic on Monday.

In light of the market volatility, von der Leyen aimed to convey a sense of stability. “We are prepared to engage in negotiations with the U.S.,” she remarked. The EU imposes an average tariff of just 1.6 percent on non-agricultural imports from the U.S., though it levies a higher tariff of 10 percent on American cars—the only G7 nation still subject to this charge due to the uncompleted TTIP negotiations.

EU Trade Commissioner Maroš Šefčovič further clarified that the proposed zero-for-zero agreement could extend to cars and a wide range of industrial goods, including chemicals, pharmaceuticals, rubber, and plastic machinery. von der Leyen also indicated that the EU is ready to respond to U.S. actions: “We are prepared to take countermeasures and protect our interests,” she asserted.

Earlier on Monday, the EU’s 27 trade ministers convened in Luxembourg to discuss the U.S. tariffs and the Commission’s response. This week, the EU is anticipated to announce its countermeasures against Trump’s 25 percent tariffs on steel and aluminum that have been in effect since last month. Šefčovič informed reporters after the meeting that the Commission has compiled “a robust list” of potential responses.