Half time in EU/US trade bout - what's the score 45 days in?

Euronews

24-05-2025

"The longer Russia wages war, the tougher our response," High Representative Kaja Kallas declared this week after foreign ministers of the European Union formally adopted a new round of sanctions against Russia for its full-scale invasion of Ukraine.
The measures blacklisted 189 vessels belonging to Moscow's so-called "shadow fleet", bringing the total number of ships under restrictions to almost 350.
The following day, Poland made a startling announcement.
"A Russian ship from the 'shadow fleet' under sanctions was performing suspicious manoeuvres near the power cable connecting Poland and Sweden," Prime Minister Donald Tusk wrote on social media.
"After effective intervention by our military, the ship sailed to one of the Russian ports."
The coincidence of events exposed, once again, the formidable challenges that the EU faces in its year-long mission to crack down on the obscure flotilla of decrepit tankers that Moscow has deployed at sea in a bold and dangerous attempt to bypass the stringent economic restrictions imposed by the West.
Political focus on the "shadow fleet", as it is commonly known, has steadily grown since June 2024, the first time that Brussels designated Russian-operated oil tankers and denied them access to EU ports and EU services. Back then, the logic behind the blacklist centred primarily on preventing large-scale circumvention.
But a series of incidents in the Baltic Sea, including one in December that saw Finland seize an oil tanker suspected of deliberately cutting a critical undersea cable, caused widespread alarm and brought to light the extreme risks the "shadow fleet" poses to the bloc's security and environment.
Last week, Estonia issued a stark warning: Russia is now willing to protect its ageing ships with military force, if necessary, to enable its duplicitous trade of seaborne oil.
The message came after the country intercepted a suspicious vessel navigating its waters without seemingly having a flag or insurance. After Estonian authorities stopped the ship, a Russian military plane appeared on the scene.
"This fighter jet violated NATO territory for one minute. This is something very new," Estonian Foreign Minister Margus Tsahkna said at a NATO meeting in Turkey.
"We need to understand that Russia has officially tied and connected itself to the Russian shadow fleet," he stressed.
"We need to understand that the situation is really serious."
The Kremlin assembled its "shadow fleet" in response to the price cap on Russian seaborne oil that the G7 and Australia established in December 2022 after months of intense negotiations. The ground-breaking initiative prohibited Western companies from providing key services to Russian tankers, such as insurance, financing and flagging, that sold crude oil above an agreed-upon price tag of $60 per barrel.
The G7 introduced two additional caps for premium-to-crude products ($100 per barrel) and discount-to-crude products ($45 per barrel).
With international scrutiny at an all-time high, Moscow resorted to poorly-kept tankers, some aged 20 years or older, managed by convoluted structures designed to obscure their real ownership and operator. The ships were given sub-standard insurance, outside the market-leading coalition, and "flags of convenience" from countries reluctant to follow Western restrictions, such as Panama, Liberia and the Marshall Islands.
Over time, the Kremlin amassed a large fleet comprising as many as 650 tankers capable of evading the surveillance of G7 allies through a range of deceptive practices, such as transmitting falsified data and turning off transponders to become invisible.
The gamble paid off: since 2022, Russia has consistently sold Urals oil at a price exceeding the $60 cap, reaching as high as $85 in April last year. China and India have replaced Europe as Russia's top oil clients, providing vital income for the war economy.
But it also came with considerable costs: according to the Kyiv School of Economics (KSE), Moscow has spent $10 billion to build the armada, which today handles the majority of Russia's crude oil trade worldwide.
In Brussels, the blatant circumvention soon turned into an increasingly untenable problem, aggravated by the awkward fact that a sizable share of these run-down tankers have been sold to Russia by Western European firms, particularly those in Greece.
Notably, the bloc has refrained from introducing a straightforward ban on the sale or ownership transfer of tankers to Russia, despite having forbidden thousands of other exports that Moscow badly needed.
Instead, it introduced a notification system under which EU companies and individuals are obliged to alert these transactions if the potential buyer is connected to Russia. The sale is, by default, prohibited unless the national authority gives authorisation.
After several rounds of sanctions, the EU has expanded its blacklist to 342 vessels from the "shadow fleet", some of which have also been targeted by the UK and the US. The bloc has imposed individual sanctions on companies that enable the evasion of the G7 price cap, most recently VSK, a prominent insurer of Russia's energy sector.
Ursula von der Leyen has said more penalties are on their way.
"This signals that, after nearly three years, Western governments are beginning to take the issue seriously," Petras Katinas, an energy analyst at the Centre for Research on Energy and Clean Air (CREA), told Euronews.
The continued designation has helped curb the fleet's maritime activities, as ports are increasingly reluctant to accept cargos from blacklisted ships, Katinas said. The latest monthly report from CREA shows that the share of "shadow" tankers to transport Russian oil has fallen from 65% in January to 53% in April, with the remaining 47% done by tankers owned or insured by G7 countries, which must comply with the price cap.
However, several loopholes remain. For example, ship-to-ship transfers, which Russia uses to disguise the origin of its crude oil and sell it deceitfully on the global markets.
"These operations should be banned outright, as they pose a clear risk to sanctions enforcement and maritime safety," Katinas said.
The impenetrable obscurity that surrounds the "shadow fleet" has turned the crackdown into a whac-a-mole of sorts: as soon as one vessel is blacklisted, another one emerges from the shadows. Sometimes, even those blacklisted manage to pull through.
"Data clearly shows that simply sanctioning vessels is not enough. More robust enforcement is needed to ensure these designations have a real impact," said Yuliia Pavytska, manager of the sanctions program at the Kyiv School of Economics Institute.
"Not all sanctioned vessels remain idle after being listed," she cautioned, noting that many ships loaded Russian oil "at least once" after being added to the EU's blacklist.
A potential game-changer could involve introducing stringent limitations on the transit of "shadow fleet" vessels through European waters to hinder their navigation abilities.
"Though this would likely require the strongest political will and action," Pavytska admits.
International maritime law provides the right of innocent passage that compels all states to guarantee unimpeded, non-discriminatory transit for foreign vessels. The right entails a heavy burden of proof to justify the boarding and seizure of a foreign ship, which is considered a radical option that must be based on clear grounds of illegal activity, as Finland did when it stopped Eagle S on suspicion of sabotage and vandalism.
In theory, stretching the interpretation of this right to empower authorities to intercept and halt "shadow fleet" vessels on a wide and regular scale would allow the EU to bring its crackdown, criticised for being too incremental, to the next level of effectiveness.
But it could easily backfire by setting a bad example to the rest of the world: in a recent study, the International Institute for Strategic Studies (IISS) warned such an aggressive plan would embolden "revisionist states", such as China, Iran and Russia, to "abuse the system more than they already have" and "leave the West more vulnerable to charges it already faces of inconsistency in the application of global principles".
It's 45 days after US President Donald Trump announced a 90-Day pause in the trade war he launched against partners across the globe, but negotiations between the EU and the US appear not to have moved on one inch in that time.
A week after both sides sent each other letters with their respective offers, Trump threatened on his social media Truth to impose 'a straight 50% tariffs on European Union' starting on 1 June 2025.
'The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,' Trump wrote, adding: 'Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 (sic) a year, a number which is totally unacceptable.'
The EU has always rebuffed US calculations of the trade deficit, pointing to a US surplus on services and deducing as a result that there's a trade surplus of no more than €50 billion for the EU.
Currently, the US imposes 25% tariffs on EU aluminium, steel and cars and blanket 10% tariffs on all EU imports to the US.
Last week, the Commission, which negotiates on trade deals on behalf of the 27 member states, received a letter from the US administration to which it replied.
Officials who saw both offers saw little hope of seeing the negotiations progress by the time the 90-Day pause period ends, not only because the US is caught up in numerous negotiations with its partners around the world, but also because both offers were radically far apart.
The EU is proposing zero-to-zero tariffs on all industrial goods and purchases of US liquefied natural gas, AI technology and non-sensitive agri-products such as soybeans. It also hopes its proposal to collaborate with the US administration on some common issues vis-à-vis China, such as overcapacities, could help move negotiations forward.
Diplomatic sources told Euronews there are slim chances that the EU will manage to return to the level of tariffs that existed before Trump's trade war, even if a majority of EU member states is still hoping to do so.
The Commission itself has proposed a €95 billion package of countermeasures to 'rebalance' the trade relations if the negotiation fails. It would come on top of a first list of US products worth €21 billion that would be hit by EU tariffs and which was suspended after Trump announced a truce.
Maroš Šefčovič has three times travelled to Washington to meet US counterparts Howard Lutnick and US trade representative Jamieson Greer. The EU is hoping that the US might turn the dial by agreeing to a meeting between Šefčovič and his US counterparts in June on the occasion of an OECD meeting in Paris, on home turf.
For weeks, the Commission has been saying that meetings were taking place at 'technical' level between both sides of the Atlantic. But the negotiation proper has not started.
In this edition, we are joined by Cynthia Ní Mhurchú, the Irish politician, barrister, and former broadcaster who represents the Ireland South constituency in the European Parliament since July 2024, Yves Bertoncini, the French political scientist and consultant specialising in European affairs and Bruno Waterfield a seasoned British journalist based in Brussels, currently serving as the Brussels correspondent for The Times.
The panel reflect on the EU/UK summit that took place last Monday in London. Called the 'Reset Summit' by some and the 'Surrender Summit' by others, a potential deal was clinched on a range of issues from defence to fishing to the movement of young people between the UK and the EU.
Cynthia Ní Mhurchú said the summit was a 'great start'.
But, Bruno Waterfield warned that the document was very general.
But Yves Bertoncini insisted that the summit was not about Brexit and bad feelings about divorcing, but about a 'fresh start'.
"It is a new phase to go forward in a different political context", he said.
The panel also discussed the so-called 'Pfizergate' that describes the transparency and accountability scandal involving the European Commission President President Ursula von der Leyen, and the CEO of the American pharmaceutical company Pfizer. The controversy centres on the procurement of COVID-19 vaccines during the pandemic and the lack of transparency shown to the press regarding text messages between Ursula von der Leyen and Pfizer.
Bruno Waterfield called it a 'slap in the wrist' for the European Commission but argued that almost every decision in Brussels takes place 'shrouded in secrecy'.
But Yves Bertoncini recalled that the Commission was improvising to respond to the Covid 19 crisis in an urgent way.
Finally, the panel debated the politics around the Eurovision song contest.
Bruno Waterfield called the contest an 'appalling sort of night of bad taste and bad music" and slammed the "cultural boycott of Israel".
But Cynthia Ní Mhurchú, who actually presented the Eurovision Song Contest back in 1994, insisted the contest was and remains 'wonderful'.
"I thought Basel did a fantastic show", she said adding that artists should not be singeld out for the mistakes of political leaders.
Watch "Brussels, my love?" in the player above.