On February 23, the European Commission (EC) issued an official assessment that US President Donald Trump's new tariff policy will push the tariffs on some agricultural products and exports of this bloc beyond the permissible ceiling in the bilateral trade agreement.
This move comes after the US Supreme Court on February 20 rejected Mr. Trump's use of the national emergency power law to impose reciprocal tariffs globally. On the very day of receiving the ruling, President Donald Trump changed course and announced the application of a new global tariff of 10%, and just one day later, on February 21, he officially raised this tariff to 15%.
Earlier this week, the bloc's trade regulator announced to lawmakers that the new global tax rate would be added to current taxes.
According to Chairman of the European Parliament's Trade Committee Bernd Lange, the new cumulative rate means that many items such as butter, milk, plastics, textiles and chemicals will have to bear a tax rate exceeding the 15% ceiling that the two sides have previously finalized. Notably, these new tax rates can be maintained for up to 150 days.
The historic trade agreement between the two sides of the Atlantic was finalized last summer. Accordingly, the US imposed a 15% tariff ceiling on most European exports, in exchange for the bloc lifting tariffs on many US goods entering the common market. However, the US still insists on maintaining a 50% penalty tariff on steel and aluminum imported from the old continent.
Member countries previously agreed to compromise on this somewhat overwhelming agreement in the hope of avoiding a full-scale trade war with the US and maintaining essential security support from the US.
However, in the face of successive new tax moves, the European Parliament decided to suspend legislative work on the ratification of the agreement to request the White House to clarify trade policy.
Last weekend, the bloc's Trade Director, Maros Sefcovic, had urgent discussions with US Trade Representative Jamieson Greer and Trade Secretary Howard Lutnick.
International sources say that the two sides may need a transition period of up to 4 months to resolve the obstacles. Although both Europe and the US are sending signals to stick to the initial agreement, how to remove this bottleneck remains a big question mark.
