World trade: USA make EU new offer in the customs conflict

The United States presented a new offer in the trade conflict with the EU. The EU Commission confirmed the receipt of a corresponding US document on Thursday. It is now being examined, said Commission President Ursula von der Leyen on Friday night after an EU summit.

“We are ready for an agreement. At the same time, we prepare for the possibility that no satisfactory agreement will be reached,” said von der Leyen and added: “All options stay on the table.” Neither the Commission President nor EU President António Costa wanted to comment on the content of the proposal.

Merz prefers to want quick and easy solution

Chancellor Friedrich Merz (CDU), however, pushed for pace after the consultations in Brussels: “Better now quickly and easily than slowly and highly complicated,” he said in terms of negotiations with the USA. The tariffs introduced by US President Donald Trump endangered German companies. A solution is particularly needed for the automotive industry, the chemical industry, the pharmaceutical industry, mechanical engineering and steel and aluminum industry.

At the same time, Merz emphasized that he did not criticize the current negotiation of the responsible EU Commission. “I only proposed and pushed to make it too complicated,” he said.

Trump threatens other tariffs if there is no agreement

Against the background, Merz said that US President Donald Trump wants to enter into force even more tariffs from July 9th if the EU does not accommodate the United States on trade issues. The Republican justifies his course with the fact that he wants to correct alleged trade weights.

At the same time, customs revenues should serve to at least partially counter its expensive election promise of large tax cuts. The EU Commission, on the other hand, sees the tariffs as not justified and incompatible with the rules of the World Trade Organization (WTO).

From the Leyen: EU ready for countermeasures

In the event that there is no acceptable agreement with the United States, the authority wants to quickly impose tariffs. The Leyen emphasized that one was ready to defend European interests if necessary and discussed a list of “compensatory measures”. Merz expressed support for this course. “If there is no agreement on the tariffs, the European Union is ready and able to take appropriate measures,” he said.

Agreement in the negotiations between China and the USA

In the conflict between China and the USA, however, a step towards de -escalation seems to have been successful. According to both countries, the negotiators were able to agree on a certain trade restrictions. As the Ministry of Commerce announced in Beijing, China will examine and approved applications for the export of “controlled goods”, which correspond to the provisions. In return, the United States would pick up a number of “restrictive measures” against China, it continued.

US President Donald Trump had previously mentioned an signed agreement with China – but left many questions open. US trade minister Howard Lutnick then confirmed in the interview of the financial news agency Bloomberg that the deal was signed with China.

Due to China’s export restrictions on rare earths, industry was recently under significant pressure outside of the People’s Republic. In Germany, too, companies in the automotive industry or in mechanical engineering also take care of the supplies of the important metals, which are installed for sensors or in electric motors, for example.

Will the WTO be replaced in the long term?

Triggered by the impending trade wars there is a new idea in the European Union: a replacement for the now largely incapable of acting world trade organization (WTO). At the EU summit, the organization brought the Leyen into play at the EU summit.

Merz even spoke of a “new type of trade organization” that could gradually replace “what we no longer have with the WTO today”. The CDU chairman means mechanisms for setting up trade disputes. The European Commission could establish such mechanisms for new EU trade agreements, said Merz.

The WTO was founded in 1995 to reduce global trade barriers. She has been suffering from increasing protectionism, outdated rules and the blockade of his appeal committee for years. Reforms have so far failed due to the disagreement of the members.