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Can the US and the EU Strike a Trade Deal?

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Bloomberg Apr 15 20:45 · 36.1k Views

The European Commissioner for Trade and Economic Security, Maros Sefcovic, met with US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer on Monday. In a post on X, Sefcovic said the European Union remains "constructive and ready for a fair deal" with the US that could include reciprocity through a "0-for-0 tariff offer on industrial goods" and the work on "non-tariff barriers." Bloomberg's Oliver Crook reports.

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Transcript

  • 00:00 Olly, the big question, Can the US and the EU make a deal?
  • 00:04 Yeah.
  • 00:05 So, Lizzie, I think everybody wants a fair deal.
  • 00:06 I think everybody's got a pretty different idea of what that means.
  • 00:09 Let's just get to the tweet that we got from Mara Sefkovich, the trade representative from the EU, after his discussions
  • 00:15 with
  • 00:15 leaders and policymakers over in the United States, saying that the EU remains constructive
  • 00:20 and ready for a fair deal, including reciprocity through zeros through 40 tariffs
  • 00:25 on industrial goods and also working on non tariff barriers.
  • 00:29 Let's deal with each of those, right?
  • 00:30 There's zero for 0.
  • 00:31 This is the proposition of basically creating a free trade zone between the EU and the United States on industrial goods.
  • 00:37 We should say that before all of the tariff activity that the United States imposed upon the EU and around the world, the basical difference in terms of tariffs between the EU and the United States was about 0.5%
  • 00:47 on average.
  • 00:48 So if we're going to imagine what the United States wants is, they're going to want something much bigger than that.
  • 00:52 That takes us to the very thorny and very complex discussion of the non tariff barriers that the US wants to dissolve from the EU.
  • 00:59 What they mean by that is still not entirely clear.
  • 01:02 We had Peter, Peter Navarro over the weekend talking about value added tax.
  • 01:05 Whenever you talk to ministers in Europe about getting rid of the value added tax, it's basically a non starter.
  • 01:10 It's effectively a sales tax that is indiscriminate on whether something is an export or an import.
  • 01:15 You have food safety standards.
  • 01:17 This is another issue that the
  • 01:18 Trump administration has brought up on repeated on repeated occasions.
  • 01:22 There are also potentially something where you could actually find some space, potentially auto regulations.
  • 01:26 If you have a sort of uniform auto regulation for the EU and the United States, you don't need to have two different kinds of cars for two different kinds of regimes.
  • 01:33 So these are some of the conversations that are being held here.
  • 01:35 The fine line for European policy makers is basically giving concessions to United States while at the same time not really letting DC legislate domestic law to the Europeans.
  • 01:47 And so, Wally, given the reprieve that we might see when it comes to autos, given that we're seeing the DAX outperforming in terms of the futures this morning for Europe,
  • 01:58 the DAX is up a quarter of a percent, Euro stocks, 50, futures down a 10th of a percent.
  • 02:02 What do you expect is going to be the reaction from Europe's automakers this morning?
  • 02:07 Yeah.
  • 02:08 So let's just get to sort of what the president actually said because in all of these discussions and basically the markets hanging on every single word of every single member of the cabinet, we did hear from Donald Trump I yesterday talking about the auto tariffs.
  • 02:20 Haven't listened to what he had to say.
  • 02:23 I'm looking at something to help some of the car companies where they're
  • 02:26 switching to
  • 02:28 parts that were made in Canada, Mexico and other places.
  • 02:31 And they need a little bit of time
  • 02:34 because they're going to make them here,
  • 02:36 but they need a little bit of time.
  • 02:37 So I'm talking about things like that.
  • 02:39 But the European Union is taking terrible advantage.
  • 02:42 They don't take our food products,
  • 02:44 they don't take our cars.
  • 02:46 We take, we have millions of their cars, BMW,
  • 02:50 Volkswagen, Mercedes-Benz, many others.
  • 02:53 They come in by the minions, they don't take.
  • 02:55 There are no Chevrolets in Munich, I can tell you that.
  • 03:01 And Lizzie, I can confirm I've never seen a Chevrolet
  • 03:04 in Munich.
  • 03:04 But what we might be able to see is no tariffs imposed on those low cost parts.
  • 03:08 And this is a huge part of the system here for these automakers who've been lobbying the Trump administration for a number of months to try to get a sort of carve out.
  • 03:15 Remember, he already delayed the tariff on those low car parts until May the 3rd.
  • 03:19 We may get that extended a little bit further.
  • 03:21 And we saw a very sort of euphoric reaction in the US Automakers saw Ford, GM, Stalantis all gaining a lot yesterday.
  • 03:27 Just showing you, Lizzie, how sensitive this market is to any potential bad news, but of course also to good news.