EU May Spend $56B on U.S. Goods to Avert Tariff War
BRUSSELS: EU nations could commit to spending an extra $56 billion on American products to end the tariff showdown with US President Donald Trump, EU Trade Commissioner Maros Sefcovic said in an interview with the Financial Times published Thursday.
Sefcovic, who has been leading negotiations with the US administration, said that 'certain progress' had been made but the European Union would not accept the United States' 10 percent tariff on EU goods.
Sefcovic said that once US services are taken into account, the US trade deficit with the 27 EU nations is about 50 billion euros ($56 billion) a year.
'If what we are looking at as a problem in the deficit is EUR50 billion, I believe that we can really . . . solve this problem very quickly through LNG (Liquefied Natural Gas) purchases, through some agricultural products like soyabeans, or other areas,' the commissioner told the FT.
Trump has said the deficit is several hundred billion dollars a year and has imposed a 25 percent tariff on EU-made cars, aluminium and steel. Other goods have a 10 percent tariff.
The US president originally imposed a 20 percent tariff on EU goods but this has been suspended until July and negotiators are now seeking to avoid a full trade war over the tariffs if this level comes into force.
Sefcovic said that even a 10 percent base tariff would be a 'very high' level that the EU could not accept.
The commissioner said that while the two sides had a greater understanding of the other's position, it would still be 'very difficult' to reach a deal that was 'clearly good and acceptable for our member states and our European parliament'.
EU Trade Commissioner Maros Sefcovic. REUTERSpix
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Bangladesh faces textile tsunami
BANGLADESH's limited capacity to deal with the enormous waste generated by its textile sector may prove unsustainable as the global fashion industry faces pressure to reduce its environmental footprint. The world's second-largest apparel producer, Bangladesh only recycles a small percentage of its textile waste, with the rest shipped abroad or left to pollute the landscape. As more countries introduce rules requiring greater recycled content in clothes, analysts and business owners say Bangladesh must expand recycling to meet demand from a global textile recycling market projected to be worth US$9.4bil by 2027. The European Union published in March its first roadmap towards meeting the standards under its Ecodesign for Sustainable Products Regulation, which includes provisions for reducing the environmental harm caused by the textile industry. This will require Bangladesh and other fashion suppliers to boost recycling while improving working conditions in what is largely an informal sector, said Patrick Schroder, a senior research fellow at the British think tank Chatham House. 'As the call for recycling grows and fast fashion goes out of fashion in the coming years, millions of jobs will be impacted, and Bangladesh needs to think ahead to step up its capacity to keep up with the changes,' he said. Tonnes of waste Bangladesh's fashion industry is estimated to produce up to 577,000 metric tonnes of textile waste from the factories each year. Most of it is shipped abroad, and the rest is left to clog bodies of water, pollute the soil, enter landfills or be incinerated, which produces toxic gases, according to a report by Switch to Circular Economy Value Chains, a project supported by the EU and the Finnish government. What is processed has evolved into a vast, informal business in Bangladesh. Thousands of informal workshops sort and bundle the waste, known as jhut, and what remains in Bangladesh is downcycled to make low-value products like mattresses, pillows and cushions. When clothing scraps are swept up from factory floors, politicians and other influential people control who gets them and at what price, said Asadun Noor, project coordinator at the United Nations Industrial Development Organisation in Dhaka. 'This is a very opaque process, offering limited visibility of the waste value chain to clothing brands and suppliers,' he said. The scraps go to hundreds of mostly unregistered workshops near the capital Dhaka, where they are cleaned and sorted into batches based on quality, colour and other considerations. Tens of thousands of workers, 70% of them women, sort the remnants for 10 to 12 hours a day, a study by the UN's children agency Unicef said last year. Workers said they toil for low wages without key safety measures, like drinking water, paid sick leave or protection from harassment. One of them is Sabura Begum, 30, who works with 250 other women at a workshop in the city of Narayanganj, near Dhaka. 'I earn a wage of about US$80 a month and it does not make it easy to run my family,' she said. A small share of the waste sorted in workshops like Begum's is sent to about two dozen recycling factories in Bangladesh. A large portion is exported to other countries such as India or Finland for recycling into new fibre where this is a larger base of recycling facilities as well as advanced technology like chemical recycling that produces strong, fresh fibres. Some of the fibres made from exported scraps are then sent back to Bangladesh to be made into clothes. More local recycling could save Bangladesh about US$700mil a year in imports, the Switch to Circular Economy Value Chains report estimated. Other major textile hubs are ramping up recycling capacity. For example, India recycles or reuses about 4.7 million tonnes, or about 60%, of its textile waste, according to a report by Fashion for Good, a coalition of businesses and non-profits. Doing a better job Some Bangladeshi companies are aiming to compete and provide proper labour standards. In 2017, Entrepreneur Abdur Razzaque set up Recycle Raw, which has now become one of the largest waste-processing businesses in Bangladesh. 'We offer decent wages and respect basic labour standards – ensuring things like drinking water, air circulation and security for our largely female workforce – so we attract and retain them much better than others,' Abdur Razzaque said. A few local recycling factories are also investing in adding more production lines, but large-scale investment in technology like chemical recycling, with support from fashion brands and development-finance organisations is needed, said Abdullah Rafi, CEO of recycler Broadway Regenerated Fibre, based in the city of Ashulia, near Dhaka. However, investors expect a regular supply of waste feed stock and that means the current opaque system of handling waste would have to go, he said. 'What we now need is more finance and collaboration among brands, suppliers, waste handlers and recyclers to scale up our capacity,' said Abdullah. — Reuters
The Star
2 hours ago
- The Star
From shophouse to global hub: Malaysia's automotive journey
Asia's very first automotive assembly activities date back almost one hundred years. The pioneers in local assembly used to be Ford, when in 1926 was incorporated in Singapore as Ford Motor Company of Malaya Ltd. Operating from a small shophouse garage, it began with wheel-fitting and touching up early Model-T kits sourced from Ford England and Canada. A far cry from the state-of-the-art assembly plants that can push out thousands of units a month today. The first fully-fledged automobile assembly plant was set up in Singapore by Ford, with production facilities of completely knocked-down (CKD) vehicles. During the Japanese occupation, the plant was used to produce military trucks. In the post-war years, as newly independent nations began charting their economic futures, industrialisation – and with it, automotive manufacturing – became a natural focus. The Asean blueprint for development post-independence has been largely industrialisation-focused and began to look at reducing their reliance on imported vehicles. Over time, the most critical starting point is to upskill the talent, implement government policies and incentives, and build local infrastructure to support it. The automotive supply chain has grown tremendously, a spark that has ignited investments, skills development, and technology transfers – powering hundreds of thousands of livelihoods. As the supply chain became more embedded, global brands began to eye countries like Thailand, Indonesia, and Malaysia as suitable hubs for regional expansion. Initially manufacturing for the domestic market, post-war economies were flourishing, and mobility was an essential part of this growth. The following decades saw the automotive industry evolve organically, gradually increasing the local content component in alignment with national policies, attracting interest and investment from European and Japanese brands, who saw Asean as an attractive hub for regional expansion. The era of complex automotive supply chains Digitalisation, trading blocs, and supply chain-related technologies gave the world a massive boost when it came to regional integration. Cars were now being built with content from multiple countries, with each component being optimally sourced at the best quality and price from vendors across the region. This allowed for increasingly resilient supply structures, with better flexibility and scalability. Toyota, with its Toyota Production System, pioneered manufacturing and logistical processes that are emulated globally, optimising complex supply chains to clockwork precision. Today, your car could be designed in Japan, made in Malaysia, with tyres from Thailand, brakes made in Indonesia and seats from Vietnam – a truly Asian testament to integration – and Malaysia played the role of quiet architect. Working fantastically together, with each component coming together at the right time and in the right specification on the final assembly line. Domestic or export? Why not both? Export-oriented hubs that also serve the local economy are a great move forward. Jobs created, skills enhanced, technology infusion, and the local market gains access to more advanced cars – the economic benefits multiply. Whilst the world's leading car brands do not originate from Asean, the region remains a strong manufacturing base and a key source of growth, ensuring their significant and enduring presence here. The rise of xEV and China In more recent times, the rapid growth of electrification has shifted the technological focus, attracting big leaps in investment, technology, and upskilling. One cannot talk about electrification without mentioning China. China is integral to electrification. Supported by a thriving local economy, the country has been able to grow the local infrastructure exponentially in developing batteries, their component technologies, and raw material extraction and refinement, and is now the linchpin of critical technologies in the pursuit of a green future. It is a space that is rapidly evolving, too, as governments increasingly view energy transition as a matter of national security and critical industries. New iterations of batteries and platforms continue to leapfrog previously cutting-edge technologies. Can Asean keep up with this pace of evolution? While no one region can match China's scale overnight, Asean's opportunity lies not in direct competition – but in complementing the ecosystem. In a world of shifting alliances, agility and trust matter more than sheer volume. Supply chain interdependencies and geopolitical conditions will make alliances and partnerships a critical, if not essential, pathway to joint prosperity in the region. Asean member countries make up 670 million people, making it the fifth most populous region. Collectively, they produce around 4.5 million cars annually, making it the fifth largest sub-regional market. Global brands recognise the potential, catapulting Asean as a hub for manufacturing, exports, and component supply. Asean's generally trade-friendly policies also make it favourable for manufacturers looking to access markets they otherwise cannot. This cushions the impact of geopolitical tensions, like the tariff wars. Malaysia, Indonesia, and Thailand are well-positioned to capitalise. In the process of building these support networks for car brands, we continue to grow and flourish. Our talent pool, technology and training skills, research and development, and production capabilities continue to expand. From a humble shophouse to regional relevance, Malaysia's journey reflects the power of steady progress. And our future – built on talent, trust, and tenacity – is going strong.
The Star
2 hours ago
- The Star
Exclusive-Crypto giants set for EU green light amid growing regulatory rift, sources say
PARIS/FRANKFURT (Reuters) -Two of the world's largest cryptocurrency companies are poised to secure licences granting them access to operate across the European Union, as a rift grows among regulators over the speed and rigour of some countries' approvals, according to sources familiar with the matter. Under the EU's new Markets in Crypto-Assets (MiCA) regulation, which came into force earlier this year, member states can issue licences that allow crypto companies to operate throughout the 27-nation bloc, but some have raised concerns in closed-door meetings about the speed with which licences are being granted, two people familiar with those discussions said, asking not to be named because of the sensitivity of the matter. At stake is the oversight of the multi-trillion-dollar crypto industry, which regulators have long warned could facilitate fraud, market instability and illicit financial flows if it is not properly supervised. MiCA aims to bring crypto under the same regulatory umbrella as traditional finance, but some fear that uneven enforcement could undermine its goals. Gemini, a crypto trading platform founded by billionaire twins Tyler and Cameron Winklevoss, is on the verge of receiving a licence to operate from Malta, the smallest country in the European Union, two people said. This follows Malta's earlier approvals of OKX and granted within weeks of the new regime's introduction. The pace of Malta's approvals has drawn scrutiny from other national regulators, who meet under the umbrella of the European Securities and Markets Authority (ESMA). France's AMF has publicly warned that ESMA's lack of direct authority could lead to a "regulatory race to the bottom". Another senior regulatory official, who did not wish to be identified, said that they were concerned about accepting licences granted in countries where regulators had fewer staff, citing Malta as one example. ESMA has scrutinized Malta's licensing process, with a report due to be circulated in the near future, said one of those people. A spokesperson for the Malta Financial Services Authority said it had granted four crypto licences so far and was able to move fast due to its past experience, adding that "expedited processing" was due to its "in-depth understanding acquired over these years". It said its local money laundering standards were strict. ESMA declined to comment. OKX said its application was "rigorous" and that compliance was a priority. SELF INTEREST? The regulatory debate has intensified with expectations that Luxembourg will soon grant a licence to Coinbase, the first U.S. crypto-focused company to join the S&P 500, one of the people said. While the application has been in progress for several months, one person pointed to the relatively modest size of Coinbase's planned operation in Luxembourg. A Coinbase spokesperson did not comment on its application but said it employed 200 in Europe and that it invested in staff to ensure operations were safe. The spokesperson said Luxembourg was a "high-bar, well respected global financial centre" and that Coinbase would hire more than 20 people there by the end of the year. Luxembourg's financial watchdog declined to comment. One person familiar with Luxembourg's thinking dismissed any suggestion that the country was lax and said some critics were rather motivated by self interest in a race to attract crypto firms. Coinbase's anticipated approval is seen as a setback for Ireland, where relations with the crypto industry have cooled. In 2023, Central Bank Governor Gabriel Makhlouf compared crypto to a Ponzi scheme, warning that 'most of the time when you gamble, you're actually losing.' The global cryptocurrency market is currently valued at roughly $3.3 trillion but it has seen crises, such as the collapse and fraud of top U.S. exchange FTX in 2022. The European Union has long had to contend with divergence between its members. The dispute is unfolding as European politicians consider granting greater powers to regulator ESMA. While the European Union is united as a trading bloc and writes much regulation centrally in Brussels, countries vie with each other to attract international businesses. ESMA head Verena Ross has also pushed publicly for more powers to oversee crypto, although one person familiar with discussions among EU politicians said several countries were sceptical. (Reporting by Elizabeth Howcroft in Paris and John O'Donnell in Frankfurt, additional reporting by Hannah Lang in New York; Editing by Elisa Martinuzzi and Louise Heavens)
