EU avoids US tariff letter, eyes concessions, EU sources say
U.S. President Donald Trump began informing, in a wave of letters, a range of trading partners from Japan to Myanmar of sharply higher tariffs on goods they sell into the United States starting August 1.
Some EU sources said the bloc was close to an agreement with the Trump administration.
This could involve limited concessions to U.S. baseline tariffs of 10% for aircraft and parts, some medical equipment and spirits in an eventual deal with the Trump administration, three sources familiar with the situation said on Monday.
Two sources also said that the EU was looking into an arrangement that would allow EU automakers that produce and export cars from the United States to import more EU vehicles at tariff rates below the current 25%.
Such an arrangement would benefit German carmakers that have large U.S. plants.
The European Commission, which had aimed for a balanced and broader trade agreement with the United States, briefed EU envoys late on Monday that EU countries faced a choice between accepting an unbalanced deal or facing more uncertainty.
The Commission also said that there were no guarantees that the Trump administration would not impose further tariffs or demand further concessions.
The EU currently faces 50% U.S. tariffs on its steel and aluminium exports, 25% on cars and car parts and 10% on most other products. The U.S. is also looking into further tariffs on pharmaceuticals and semiconductors.
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Euronews
40 minutes ago
- Euronews
Trump sends tariff letters, placing 25% duty on Japan and South Korea
President Donald Trump on Monday announced a 25% tax on goods imported from Japan and South Korea, as well as new tariff rates on a dozen other nations that would go into effect on 1 August. Trump posted letters on Truth Social that were addressed to the leaders of the various countries. The letters warned them not to retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs. 'If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge,' Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae Myung. The letters were not the final word from Trump on tariffs, so much as another episode in a global economic drama in which he has placed himself at the centre. His moves have raised fears that economic growth will slow to a trickle, if not make the US and other nations more vulnerable to a recession. But Trump is confident that tariffs are necessary to bring back domestic manufacturing and fund the tax cuts he signed into law last Friday. Despite his threats, the president showed a willingness to negotiate, a tactic that suggests the drama and uncertainty will continue. 'It's all done," Trump told reporters Monday. 'I told you we'll make some deals, but for the most part we're going to send a letter.' South Korea's Trade Ministry said early on Tuesday that it would accelerate negotiations with the United States to achieve a mutually beneficial deal before the 25% tax on its exports goes into effect. Imports from Myanmar and Laos would be taxed at 40%, Cambodia and Thailand at 36%, Serbia and Bangladesh at 35%, Indonesia at 32%, South Africa and Bosnia and Herzegovina at 30% and Kazakhstan, Malaysia and Tunisia at 25%. Trump placed the word 'only' before revealing the rate in his letters to the foreign leaders, implying that he was being generous with his tariffs. But the letters generally followed a standard format, so much so that the one to Bosnia and Herzegovina initially addressed its leader, Željka Cvijanović, as 'Mr. President', although she is a woman. Trump later posted a corrected letter. Trade talks have yet to deliver several deals White House press secretary Karoline Leavitt said that Trump, by setting the rates himself, was creating 'tailor-made trade plans for each and every country on this planet". Following a now well-worn pattern, Trump plans to continue sharing the letters sent to his counterparts on social media and then mailing them the documents, a stark departure from the more formal practices of all his predecessors when negotiating trade agreements. The letters are not agreed-to settlements but Trump's own choice on rates, a sign that the closed-door talks with foreign delegations failed to produce satisfactory results for either side. Wendy Cutler, vice president of the Asia Society Policy Institute who formerly worked in the office of the US Trade Representative, said the tariff hikes on Japan and South Korea were 'unfortunate'. 'Both have been close partners on economic security matters and have a lot to offer the United States on priority matters like shipbuilding, semiconductors, critical minerals and energy cooperation,' Cutler said. Trump still has outstanding differences on trade with the European Union and India, among other trading partners. Tougher talks with China, where exports sent to the US are being taxed at 55%, are more of a long-term prospect. The office of South African President Cyril Ramaphosa said in a statement that the tariff rates announced by Trump mischaracterised the trade relationship with the US. He said that his country would nonetheless 'continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States" after having proposed a trade framework on 20 May. Higher tariffs prompt market worries, more uncertainty ahead The S&P 500 stock index was down 0.8% in Monday trading, while the interest charged on 10-year US Treasury notes increased to nearly 4.39%, a figure that could translate into elevated rates for mortgages and auto loans. Trump has declared an economic emergency to unilaterally impose the taxes, suggesting they are remedies for past trade deficits even though many US consumers have come to value autos, electronics and other goods from Japan and South Korea. The constitution grants Congress the power to levy tariffs under normal circumstances, though tariffs can also result from executive branch investigations if they are imposed on national security grounds. Trump's ability to impose tariffs through an economic emergency is under legal challenge, with the administration appealing a May ruling by the US Court of International Trade that said the president exceeded his authority. It's unclear what he gains strategically against China — another stated reason for the tariffs — by challenging two crucial partners in Asia, Japan and South Korea, that could counter China's economic heft. 'These tariffs may be modified, upward or downward, depending on our relationship with your Country,' Trump wrote in both letters. Because the new tariff rates go into effect in roughly three weeks, Trump is setting up a period of possibly tempestuous talks among the US and its trade partners to reach new frameworks. 'I don't see a huge escalation or a walk back — it's just more of the same," said Scott Lincicome, a vice president at the Cato Institute, a libertarian think tank. Trump initially roiled the financial markets by announcing tariff rates on dozens of countries, including 24% on Japan and 25% on South Korea. In order to calm the markets, Trump unveiled a 90-day negotiating period during which goods from most countries were taxed at a baseline 10%. So far, the rates in the letters sent by Trump either match his 2 April tariffs or are generally close to them. The 90-day negotiating period technically ends Wednesday, even as multiple administration officials suggested the three-week period before implementation is akin to overtime for additional talks that could change the rates. Trump signed an executive order Monday to delay the official tariff increases until 1 August. Congressionally approved trade agreements historically have sometimes taken years to negotiate because of the complexity. Administration officials have said Trump is relying on tariff revenues to help offset the tax cuts he signed into law on 4 July, a move that could shift a greater share of the federal tax burden onto the middle class and poor as importers would likely pass along much of the cost of the tariffs. Trump is pressuring major retailers such as Walmart to absorb the higher costs, instead of increasing prices, which could intensify inflation. Josh Lipsky, chair of international economics at The Atlantic Council, said a three-week delay in imposing the tariffs was unlikely sufficient for meaningful talks to take place. 'I take it as a signal that he is serious about most of these tariffs and it's not all a negotiating posture," Lipsky said. Trade gaps persist, more tariff hikes are possible Trump's team promised 90 deals in 90 days, but his negotiations so far have produced only two trade frameworks. His outline of a deal with Vietnam was clearly designed to box out China from routing its America-bound goods through that country, by doubling the 20% tariff charged on Vietnamese imports on anything traded transnationally. The quotas in the signed United Kingdom framework would spare that nation from the higher tariff rates being charged on steel, aluminium and autos, though British goods would generally face a 10% tariff. The United States ran a $69.4bn (€59.1bn) trade imbalance in goods with Japan in 2024 and a $66bn (€56.2bn) imbalance with South Korea, according to the Census Bureau. The trade deficits are the differences between what the US exports to a country relative to what it imports. According to Trump's letters, autos would be tariffed separately at the standard 25% worldwide, while steel and aluminium imports would be taxed at 50%. This is not the first time Trump has tangled with Japan and South Korea on trade — and the new tariffs suggest his past deals made during his first term failed to deliver on his administration's own hype. In 2018, during Trump's first term, his administration celebrated a revamped trade agreement with South Korea as a major win. And in 2019, Trump signed a limited agreement with Japan on agricultural products and digital trade that at the time he called a 'huge victory for America's farmers, ranchers and growers". Trump has also said on social media that countries aligned with the policy goals of BRICS, an organisation composed of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates, would face additional tariffs of 10%.
Euronews
an hour ago
- Euronews
EU Parliament confidence vote: Where parties stand on von der Leyen
The majority of the political groups of the European Parliament will not back the vote of no-confidence tabled against von der Leyen's European Commission, but even those from the coalition that voted her into office last year reproached her leadership, and some groups are split over how to vote. After the debate held in the hemicycle on Monday, some of the eight groups of the Parliament clearly staked their position ahead of the vote, while others were more ambiguous, and not all MEPs align with their groups. The European People's Party (EPP), Ursula von der Leyen's political force, is fully behind her. "We will vote unanimously against", said Manfred Weber, chair of the group. The EPP has painted the vote as the emanating from far right MEPs friendly to Russian President Vladimir Putin. "With this motion of censure, we are wasting time: Putin will be happy of what his friends are doing here. I know the German AfD (Alternative for Germany) and the Romanian AUR (Alliance for Unity of Romanians) are the puppets of Putin. This motion of censure is against the security of the Europeans," Weber said during the debate. Criticism of von der Leyen on display Socialists and democrats (S&D), Renew Europe and Greens/EFA groups have also said they will not vote to censure, but that didn't stop their chairs criticising von der Leyen for treating with the right wing parties, ignoring important policy files and leading the Commission with an extremely centralised and opaque working style. 'This motion will not count with the vote in favour of my group. We will not give a single vote to those who want to destroy the European Union,' said S&D leader Iratxe García Pérez, describing the motion of censure as a "reactionary assault". But García Pérez also blamed von der Leyen for backsliding on the Green Deal when she allied with conservatives to withdraw the Commission's controversial directive on green claims, which is meant to address greenwashing. Besides, not supporting the motion does not necessarily equate to a pledge that the Socialists will vote against it. According to sources from the Parliament, the group's members could also abstain. "We have not decided yet, we will discuss the issue in the next days before the vote," S&D Belgian MEP Estelle Ceulemans told Euronews after a group internal meeting. Renew Europe also clearly stated that it opposed the motion of censure. "The motion itself shows the bad intentions of the signatories: a mishmash of allegations on Pfizer text messages, the spending of the Recovery Facility, defence plans and supposed election interference," a statement from the group read. Renew Europe's president, Valérie Hayer, doubled down on this during her intervention, but she too took the opportunity to take a swipe at von der Leyen. "The Commission is too centralised, too fossilised", she said. The Greens/EFA group is set to reject the motion of censure, with all its MEPs voting against, abstaining, or not showing up on the day of the vote, according to internal sources. The leader of the group, Bas Eickhout called the motion 'one big political show of the far-right to undermine democracy.' But he also lashed out at recent tie ups over voting between the EPP and the far-right. 'You are feeding that beast, and at a certain moment the beast will eat you,' Eickhout said, directing his glance at EPP President Weber. The Left's co-President Martin Schirdewa said his group opposes the motion of censure because it refuses "to be instrumentalised by right-wing extremists". But others within the group don't appear to be on the same page. The Italian Five Stars Movement, for example, will vote in favour: "Millions of citizens who believe in the EU, in democracy and in social justice are asking us today to send von der Leyen home", a statement from the party said. The Left's Irish MEPs are also set to vote in favour, according to Parliament sources. Conservatives split on the vote, far right united The European Conservatives and Reformists (ECR) illustrate this shaky group dynamic more clearly: some of its members proposed and actively promoted the vote of confidence, while others are set to defend the Commission. Officially, the group will leave its lawmakers to follow their consciences with a free vote, and the largest national delegations are in opposite camps. Romanians from ultra-nationalist party AUR and Polish from Law and Justice (PiS) are among the signatories of the motion of censure, consistently with a long tradition of hard criticism against von der Leyen and her college. On the other side, the members of Brothers of Italy will not vote in favour of the motion, as this would entail the resignation of all Commissioners, including Italy's Raffaele Fitto, Commission Executive Vice-President for Cohesion and Reforms, who comes from the party's ranks. "This motion is doomed to failure, not even getting close to the required threshold [to topple the Commission]. This is a gift to our political opponents," ECR co-chair Nicola Procaccini said during his intervention. Patriots for Europe (PfE) and Europe of Sovereign Nations (ESN), the two more radical right groups in the Parliament, will vote in favour of the motion, requesting the Commission to resign. "The Pfizergate has been an abuse of power: you have acted alone, out of any democratic framework", Fabrice Leggeri, a French National Rally MEP, said during the debate, while ESN's leader René Aust from Alternative for Germany, said his group intended to send von der Leyen "to an undeserved retirement". A symbolic vote The vote of no-confidence has very little chance of being approved, as at least two-thirds of the votes cast representing a majority of all MEPs would need to back the motion of censure for it to be adopted. But Monday's debate gave an indication of the level of distrust for Von der Leyen in the parliament, regardless of MEP's political affiliation. The parties from the so-called "centrist majority" (EPP, S&D, Renew Europe) are split on the assessment of the Commission's track record so far. While the EPP group fully endorses von der Leyen's political line (and is probably also behind it), Socialists and liberals are at odds with it, signalling that the coalition which saw von der Leyen voted in as President of the Commission one year back is on shaky ground. In this respect, S&D's leader García Pérez addressed EPP President Weber at the end of her intervention: "This motion is the direct result of your strategy in the Parliament. You are asking for responsibility while you negotiate your policies with the far right. We cannot go on like this," she said. The vote on the motion on Thursday 10 will probably testify to the level of discontent. A large number of abstentions might save the necks of the Commissioners, but also simultaneously inflict a political flesh wound on von der Leyen.
France 24
an hour ago
- France 24
Bulgaria to get final green light to adopt euro in 2026
The European Commission last month said The EU's poorest country had fulfilled the strict conditions to adopt the euro, while the European Central Bank (ECB) also gave a positive opinion. Bulgaria's switch from the lev to the euro next year will come 19 years after the country of 6.4 million people joined the European Union. Bulgaria's journey to joining the eurozone has had a stormy political backdrop with seven elections in three years -- the last in October 2024. Its bid will be formally approved by EU finance ministers meeting in Brussels once they adopt the legal texts necessary for the historic move. But many Bulgarians are against switching to the euro over worries it will lead to a rise in the cost of living. Protests took place before and after the commission's decision, while surveys in the lead up showed nearly half of those asked are opposed to adopting the euro. Proponents in Bulgaria believe the move will help improve Bulgaria's economy and citizens' lives. The green light comes as the euro has been gaining in value against the US dollar as President Donald Trump's protectionist trade policies shake trust in the US currency. ECB chief Christine Lagarde in May made a pitch for the euro as a global reserve currency, saying increasing the currency's international role would offer advantages for the EU including lower borrowing costs for the bloc's member states. Euro club gets bigger Only 12 countries were part of the single currency area -- including France, Germany, Italy, Spain, and Greece -- when the first euro bills and coins were rolled out on January 1, 2002. It gradually widened with Slovenia joining in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 then Lithuania in 2015. Croatia was the last country to join in 2023, bringing the total to 20. Bulgaria wanted to adopt the euro sooner but Brussels judged its inflation was too high to meet the necessary criteria. EU states that want to join the single currency must demonstrate that their economy has converged with other eurozone countries and that they have their finances under control. The conditions include holding inflation to no more than 1.5 percentage points higher than the rate of the three best-performing EU countries. When Brussels gave its backing in June, it said Bulgaria's average inflation rate during the 12 months to April 2025 was 2.7 percent, just below the reference value. © 2025 AFP
