EU gains leverage in trade talks as US court casts doubt on tariffs, EU officials say

Yahoo

3 days ago

By Jan Strupczewski
BRUSSELS (Reuters) - The European Union has gained leverage in trade talks with the United States after a U.S. court cast doubt on the legality of Washington's "reciprocal" tariffs, EU officials said on Friday.
The European Commission said trade talks between Brussels and Washington would continue, with Europe sticking to its offer of mutual zero tariffs on industrial goods.
"There's no change in our approach, we proceed as planned with both technical and political meetings next week," a Commission spokesperson said.
A U.S. federal appeals court temporarily reinstated President Donald Trump's tariffs on Thursday, a day after a U.S. trade court ruled that Trump had exceeded his authority in imposing the duties and ordered an immediate block on them.
"The uncertainty as to the legality of the 'reciprocal' tariffs certainly gives us extra leverage," one EU official close to the talks said. "The talks will continue, as formally we still look for zero-for-zero tariffs," the official said.
The EU was also willing to discuss some non-trade barriers with the U.S., officials said, but would not touch the EU's taxation system -- such as the value added tax or digital tax -- or food safety standards.
The Commission, which conducts all trade negotiations on behalf of the 27-nation bloc, would not comment on the rulings because they were internal U.S. procedures.
EU Trade Commissioner Maros Sefcovic in a post on the X social media platform said he held a phone call with U.S. Commerce Secretary Howard Lutnick on Friday.
"Our time and effort fully invested, as delivering forward-looking solutions remains a top EU priority. Staying in permanent contact," Sefcovic said on X.
More trade talks between the U.S. and the EU are scheduled for next week, on the sidelines of the OECD Ministerial Council Meeting in Paris on June 3-4.
EU officials said the U.S. courts' rulings validated the EU view that the sweeping "reciprocal" tariffs, imposed on all goods from the EU and many other countries around the world on April 2, were unjustified.
The officials also said that while U.S. courts did not question Washington's 25% tariffs imposed on European steel, aluminium and cars, the rulings could also play a role in the EU's efforts to get those tariffs lowered or removed.
They also said the uncertainty created by the court rulings and the Trump administration's tariff policy also had a positive aspect for Europe, which was seen by markets as an oasis of stability in comparison.
"This is the watchword: uncertainty. It is impossible to know what the status of the tariffs will be next week, not to mention next month!" the EU official said.
"If you want sane, stable, even boring, rules-based order and predictable business environment, Europe is the place for you!" the official said.
(Additional reporting by Julia Payne; Reporting by Jan Strupczewski. Editing by Jane Merriman)