Unlock the Editor’s Digest at no cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
The EU will delay its plan to hit the US with tariffs on €21bn of its annual exports to Europe on Tuesday within the hope of coming to an settlement after Donald Trump introduced that he would hit the bloc with 30 per cent tariffs from August 1.
European Fee president Ursula von der Leyen stated on Sunday that the appliance of tariffs to €21bn of annual US exports to the EU, together with rooster, bikes and garments, that have been as a result of come into impact after midnight on July 14 can be suspended till “early August”.
“We’ve got at all times been clear that we choose a negotiated resolution with the US. This stays the case,” she stated.
Donald Trump introduced on Saturday that he would hit the EU and Mexico, two of the US’s closest buying and selling companions, with 30 per cent tariffs from August 1.
European leaders have been break up on whether or not the bloc ought to press for a fast framework commerce deal just like the UK’s or preserve negotiating within the hope of attaining a greater consequence.
Senior EU officers advised the FT that they didn’t anticipate Trump to in the end undergo together with his new menace of 30 per cent tariffs, which is being broadly interpreted by Brussels as a bid by the US President to extend strain on the bloc within the remaining time left for negotiations.
One EU official pointed to the probability of a really damaging US investor response to such steep measures on a key buying and selling companion.
“We belief within the markets,” the official stated.
German finance minister Lars Klingbeil known as for the EU to proceed “critical” talks. “No one wants new threats or provocations proper now. What we want is for the EU to proceed critical and focused negotiations with the US,” he advised Süddeutsche Zeitung.
Nevertheless Klingbeil warned that “if a good negotiated resolution can’t be reached, then we should take decisive countermeasures to guard jobs and firms in Europe.”
In addition to the preliminary record of counter-tariffs, the European Fee, which runs commerce coverage, is consulting on a package deal of tariffs on an additional €95bn of imports from the US, together with plane, alcohol and meals, which would wish member states’ approval. This has already been decreased to €72bn, in response to two diplomats, after governments lobbied to take away some delicate merchandise from the goal record.
The US is making use of tariffs on round €380bn of annual imports from the EU.
Von der Leyen stated that the fee would “proceed to arrange” the second record of countermeasures however she stated that the bloc wouldn’t invoke its anti-coercion instrument, which might permit it to take measures towards US service exports, for instance by blocking corporations from public procurement contracts.
The instrument “is created for extraordinary conditions — we aren’t there but,” the fee president stated, including that “the time is for negotiations”.
Her feedback got here as she introduced a “political settlement” on a free commerce cope with Indonesia after 9 years of talks.
The deal, anticipated to be finalised in September, will should be ratified by a weighted majority of member states and by the European parliament. Officers are assured it’s going to cross as Indonesia doesn’t export delicate agricultural merchandise equivalent to beef.
Bilateral commerce in items between the EU and Indonesia was €27.3bn in 2024, with EU exports price €9.7bn and EU imports price €17.5bn.
“I’m very glad that on this period of instability and confusion we’re setting a proper instance,” Indonesia President Prabowo Subianto stated.
Von der Leyen stated that diversifying its commerce agreements was a central a part of the EU’s technique to counter Trump’s commerce conflict.
Some enterprise teams and politicians, nevertheless, have criticised Von der Leyen’s method.
Italian deputy prime minister Matteo Salvini, chief of the far-right League occasion who had enthusiastically rooted for Trump’s re-election, lashed out at Brussels for mishandling the negotiations.
“Trump has no cause to assault our nation however as soon as once more we’re paying the value for a German-led Europe,” stated the League in a press release.
Coldiretti, the influential Italian agribusiness affiliation, has additionally criticised Brussels’s dealing with of the negotiations, warning that Trump’s threatened 30 per cent tariff charge can be a “deathblow” to Italy’s meals exports, and trigger an estimated €2.3bn in direct damages to Italian producers.
“If the tariffs have been to be confirmed on August 1, we can’t assist however word the whole failure of von der Leyen’s coverage,” stated Ettore Prandini, Coldiretti president.
Further reporting by Amy Kazmin in Rome, Henry Foy in Brussels and Anne-Sylvaine Chassany in Berlin