PARIS (AP) — During a recent meeting in Paris, officials from Europe and the United States reported progress in negotiations aimed at resolving a contentious tariff dispute with significant global economic implications.
Maroš Šefčovič, the European Union’s top trade negotiator, convened with U.S. Trade Representative Jamieson Greer on the sidelines of an Organization for Economic Cooperation and Development meeting.
In a statement following the discussions, Greer expressed satisfaction with the pace of negotiations, emphasizing the EU’s willingness to collaborate on achieving reciprocal trade solutions.
“I am pleased that negotiations are advancing quickly,” Greer stated.
Šefčovič echoed those sentiments, highlighting that ongoing technical meetings between EU and U.S. negotiators would pave the way for further assessments through a scheduled video conference with Greer.
Despite these affirmations of progress, experts caution that a substantive trade agreement is unlikely to emerge from the Paris talks given the complex issues at hand.
One major point of contention is the substantial trade deficit that the U.S. has with the European Union, which reached a record $161 billion last year, as reported by the U.S. Commerce Department.
President Donald Trump has often attributed this deficit to what he deems unfair trade practices and has specifically criticized the EU’s 10% tax on imported cars.
In contrast, the U.S. previously maintained a 2.5% tax on imported cars, which Trump raised to 25% in April. EU officials argue that American services—especially in technology—do much to alleviate the imbalance.
In light of the recent U.S. tariffs on steel, which have rattled global markets, the EU announced its intent to prepare countermeasures against American products on Monday.
The EU has proposed a “zero for zero” trade deal that would eliminate tariffs on industrial goods, including automobiles; however, this proposition has not garnered support from the Trump administration.
While EU representatives insist it remains on the table, barriers persist, such as the U.S. reluctance to accept any reductions in duties on imported cars.
Complicating matters, the EU might consider increasing imports of liquefied natural gas and defense products from the U.S. but is firm on preserving its value-added tax system, akin to a sales tax, which U.S. negotiators have criticized.
French Trade Minister Laurent Saint-Martin remarked on the time left to negotiate but warned that Europe is prepared to retaliate if discussions falter.
“If the discussion and negotiation do not succeed, Europe is capable of having countermeasures on American products and services as well,” he stated.
Greta Peisch, a former general counsel associated with the U.S. trade office during the Biden administration, suggested that a zero-for-zero proposal might serve as a potential path forward if the Trump administration needs justification to avoid imposing tariffs on the EU.
However, Peisch raised doubts concerning the U.S. administration’s motivation to reach an agreement with the EU, given Trump’s history of grievances regarding European trade practices.
One significant issue remains the European value-added tax, which Trump views as a form of protectionism due to the tax being applied to American goods.
It should be noted that VATs are established at a national level—rather than by the EU itself—and apply uniformly to both domestic and imported goods, complicating the narrative of them being a trade barrier.
The likelihood of European governments overhauling their taxation systems to satisfy U.S. demands appears slim.
Moreover, EU negotiators are likely to resist U.S. requests to dismantle regulations concerning food safety, which the U.S. perceives as trade barriers.
These contentious regulations involve bans on hormone-treated beef, chlorinated chicken, and genetically modified foods, which have long been sources of friction between the regions.
“When you start talking about chickens or GMOs or automobile safety standards, you’re talking about the ways countries choose to regulate their economies,” noted William Reinsch, a former U.S. trade official.
Reinsch underlined the contrasting views on these regulations; while the U.S. labels them as protective measures, the EU defends them as safeguards for public health.
As the negotiations proceed, both parties face continued challenges rooted in divergent regulatory philosophies and longstanding trade grievances.
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