EU Warns It Could Accelerate Retaliatory Tariffs Over US Duties

source : kitco

The European Union is preparing for another round of trade talks with the US and warned that it may speed up retaliatory measures if President Donald Trump follows through on his tariff threats, the latest of which includes a 50% levy on steel and aluminum imports.

The European Commission, which handles trade matters for the EU, said Monday it “strongly” regrets the tariff hike — up from an originally planned 25% — and said the move is undermining efforts to reach a solution to the trade conflict.

The EU’s trade chief, Maros Sefcovic, will meet with US Trade Representative Jamieson Greer on Wednesday in Paris and a team from the commission is on its way to Washington to continue technical talks, Commission Spokesman Olof Gill told reporters in Brussels Monday.

“If no mutually acceptable solution is reached, both the existing and possible additional EU counter-measures will automatically take effect on July 14 or earlier if circumstances require,” Gill said. “The commission has been clear at all times about its readiness to act in defense of EU interests protecting our workers, consumers and industry.”

The EU is trying to fast-track negotiations with the US before a July 9 deadline, when Trump said he’ll hit nearly all of the bloc’s imports with a 50% tariff. He’s lashed out at the bloc for being unfair on trade, and has called on the EU to reduce its trade surplus in goods and to lower tariff and non-tariff barriers, such as its value-added tax.

Trump agreed earlier to delay the implementation of tariffs on metals as well as on cars and car parts in a bid to allow negotiations to find a broader trade agreement. The EU also agreed to withhold its own counter-measures.

The EU has approved tariffs on €21 billion ($24 billion) of US goods in response to Trump’s metals levies that can be quickly implemented. They target politically sensitive American states and include products such as soybeans from Louisiana, home to House Speaker Mike Johnson, as well as agricultural products, poultry and motorcycles.

The bloc is also preparing an additional list of tariffs on €95 billion of American products. Those measures, which are in response to Trump’s “reciprocal” levies and automotive duties would target industrial goods including Boeing Co. aircraft, US-made cars and bourbon.

“In the event that our negotiations do not lead to a balanced outcome, the EU is prepared to impose counter-measures including in response to this latest tariff increase,” Gill said.

While warning of further tariffs, the bloc said its priority is to allow space for negotiations and that reducing levies remains the long-term goal.

The commission’s negotiating strategy focuses on critical sectors — such as semiconductors and pharmaceuticals — as well as tariff and non-tariff barriers, Bloomberg reported earlier. The commission will also link its approach to addressing regulatory barriers with its plans to simplify rules.

The industries that Sefcovic will focus on either have already been hit with US tariffs, or have been earmarked for future levies. The EU has proposed deepening cooperation with the US in those sectors as part of a previous proposal shared with the US last week, Bloomberg reported.

Source: Bloomberg Europe

Source: finance.yahoo

source : cnbc

U.S. manufacturing contracted for a third straight month in May and suppliers took longer to deliver inputs amid tariffs, potentially signaling looming shortages of some goods.

The Institute for Supply Management (ISM) said on Monday that its manufacturing PMI edged down to a six-month low of 48.5 last month from 48.7 in April. A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.2% of the economy.

The PMI, however, remains above the 42.3 level that the ISM says over time indicates an expansion of the overall economy.

Economists polled by Reuters had forecast the PMI rising to 49.3. The survey suggested manufacturing, which is heavily reliant on imported raw materials, had not benefited from the de-escalation in trade tensions between President DonaldTrump'sadministration and China.

Economists say the on-gain, off-again manner in which the import duties are being implemented is making it difficult for businesses to plan ahead. Another layer of uncertainty was added by a U.S. trade court last week blocking most of Trump's tariffs from going into effect, ruling that the president overstepped his authority. But the tariffs were temporarily reinstated by a federal appeals court on Thursday.

The ISM survey's supplier deliveries index increased to 56.1 from 55.2 in April. A reading above 50 indicates slower deliveries. A lengthening in suppliers' delivery times is normally associated with a strong economy. But in this case slower supplier deliveries likely indicated bottlenecks in supply chains related to tariffs.

In April, the ISM noted delays in clearing goods through ports. Port operators have reported a decline in cargo volumes.

The ISM's imports measure dropped to 39.9 from 47.1 in April. Production at factories remained subdued, while new orders barely saw an improvement.

The ISM survey's forward-looking new orders sub-index inched up to 47.6 from 47.2 in April. Its measure of prices paid by manufacturers for inputs eased to a still-high 69.4 from 69.8 in April, reflecting strained supply chains.

Factories continued to shed jobs. The survey's measure of manufacturing employment nudged up to 46.8 from 46.5 in April. The ISM previously noted that companies were opting for layoffs rather than attrition to reduce headcount.

Source: TradingView

Source: Euronews