PRECARIOUS MOMENT
The EU, alongside dozens of other economies, had been set to see its US tariff level increase from a baseline of 10 per cent on Wednesday, but Trump pushed back the deadline to Aug 1.
Mexico and Canada come under a separate tariff regime.
Since the start of the week, Trump has sent out letters to more than 20 countries with updated tariffs for each, including a 35 per cent levy for Canada. A US official told AFP Saturday that the USMCA exemption was expected to remain for both Mexico and Canada, although the president has yet to make final decisions.
Brussels said Friday that it was ready to strike a deal with Washington to prevent the return of 20 per cent levies.
The EU has prepared retaliatory duties on US goods worth around €21 billion (US$24 billion) after Trump also slapped separate tariffs on steel and aluminium imports earlier this year, and they are suspended until Jul 14.
European officials have not made any move to extend the suspension but could do it quickly if needed.
“Despite all the movement toward a deal, this threat shows the EU is in the same camp of uncertainty as almost every other country in the world,” said Josh Lipsky, chair of international economics at the Atlantic Council.
He told AFP that the path forward now depends on how the EU responds, calling it “one of the most precarious moments of the trade war so far.”
Source: CNA
