BRUSSELS — The European Union (EU) has proposed a “zero-for-zero” tariff initiative to the United States, as announced by European Commission President Ursula von der Leyen on Monday. This move aims to prevent a potential trade war between the two economic powers.
“We have offered zero-for-zero tariffs for industrial goods, similar to successful agreements with other trading partners. Europe is always ready for a beneficial deal, and we keep this option available,” she stated during a press conference alongside Norwegian Prime Minister Jonas Gahr Støre. Learn more.
Historically, the U.S. and EU were on the verge of eliminating tariffs on industrial goods about a decade ago during discussions surrounding the Transatlantic Trade and Investment Partnership (TTIP), which ultimately fell through during Trump’s first presidency.
At that time, the idea of removing tariffs on products like cars and chemicals was not contentious; however, agricultural tariffs and safety standards were significantly more debated.
Von der Leyen’s renewed offer follows Trump’s recent implementation of a 20 percent tariff on the EU and other trade partners, raising U.S. trade barriers to unprecedented levels in over a century.
The ramifications of Trump’s trade war have sparked concern among investors, leading to a global financial market downturn that saw trillions of dollars or euros lost in value. European stocks experienced their largest one-day drop since the onset of the COVID pandemic on Monday.
In the face of market instability, von der Leyen aimed to reassure stakeholders.
“We are ready to negotiate with the U.S.,” she affirmed.
The EU currently imposes an average tariff of only 1.6 percent on non-agricultural products from the U.S., but the tariff on imported American cars stands at 10 percent — a rate that remains applicable solely to the U.S. as TTIP discussions were not completed.
Clarifying further, Trade Commissioner Maroš Šefčovič stated that the proposed zero-for-zero deal could indeed extend to cars and all other industrial goods, including chemicals and pharmaceuticals.
Von der Leyen also did not dismiss the possibility of retaliation: “We are prepared to take countermeasures to safeguard our interests,” she noted.
The EU’s 27 trade ministers convened in Luxembourg earlier on Monday to deliberate on the U.S. measures and the Commission’s potential responses.
This week, the EU is also expected to announce retaliatory measures against Trump’s 25 percent tariffs on steel and aluminum, which have been in effect since last month. Šefčovič shared with reporters after the Luxembourg meeting that the Commission has prepared “a robust list.”
(This article has been updated.)
