MNI: US Pushes EU For More Concessions Despite Deal- Officials

A joint statement between the U.S. and the EU formalising their July 27 trade agreement is being delayed by a gulf between the two sides’ understanding of what was agreed, with Washington pushing for further concessions in return for confirming a 15% tariff cap in key areas such as cars and pharmaceuticals, EU sources told MNI.

While U.S. officials have said they are close to signing off on the joint statement, sources said the deal seems less concrete than Brussels had originally believed. Washington wants further movement by the EU in phytosanitary and public procurement rules and in digital regulation, areas regarded as red lines and which Brussels thought had already been settled, they said.

"The U.S. says they are close to signing the mutual declaration, but that is not so important, it will not contain much of substance. The issue now is that the agreement on the reduction of tariffs on cars is still not applied by the U.S., so we have a first bottleneck to solve,” one EU official said. 

"They are taking much more time than expected to respect the deal.” 

Another EU trade source agreed, pointing out that the statement is just a matter of "packaging". The real problem is that the underlying deal is not there yet.

"The EU thought that cars were part of the deal, but it appears not. Now the U.S. is asking for more concessions for that,” the source said, adding that a similar gulf in understanding applies to pharma, which is still under a U.S. 232 probe. (See MNI INTERVIEW: EU Should Ditch Deal If US Reneges On Pharma)

"Again, the EU understands that, if tariffs on pharmaceuticals are introduced then not above 15%, but that is not something the U.S. is confirming,” the source said.

TRUMP THREATS

Another source said that the near three-week delay since the deal was agreed at Turnberry was strongly suggestive of "major disagreements" between the two sides, as have been recent renewed tariff threats from U.S. President Donald Trump.  

In recent days, the European Commission has publicly evaded questions on the timeline for publication of the long-awaited joint statement. Trade Spokesperson Olof Gill said on Tuesday that it would be "soon.” 

Sources said Trump’s meeting with Russia’s Vladimir Putin over Ukraine in Alaska on Friday may also have an impact on U.S.-EU trade. 

"It's still a separate issue but if Europeans are too pushy and things go wrong after Alaska, Trump may start looking for culprits,” one official said, though Gill said that Ukraine and trade were separate issues.

The former head of the Commission's DG Trade EC Jean-Luc Demarty reiterated to MNI his personal view that a continued U.S. failure to respect the Turnberry deal should be met with a robust response, including countermeasures.

"If Trump doesn't respect key terms of the deal and gives up on Ukraine, there will be retaliation,” Demarty said.