EU Parliament Proceeding as If US Were Upholding Trade Agreement

Sabine Weyand, the European Commission's directorate-general for trade and economic security, said that the U.S. "has already taken several steps to implement" the provisions it promised in a joint statement: "As of first September, the U.S. applies only most-favored nation (MFN) tariffs to EU exports of products agreed to be exempted from the 15% tariff ceiling," and noted those goods had either zero tariffs before the trade war, or close to zero. She said that it is important that the EU lower tariffs so "we, on our side, also honor this commitment." Her statement comes as the U.S. has made no modifications to the Harmonized Tariff Schedule (see 2509020080).

The press office of the Office of the U.S. Trade Representative and a White House spokesperson have not answered repeated questions over several days from International Trade Today on what products will return to MFN, and why that didn't happen on Sept. 1, as promised. The products mentioned in the joint statement are mostly already carved out of reciprocal tariffs because of pending Section 232 investigations, but cork and undefined "natural resources" were listed too.

The EU, as well, has not answered questions about what became of the Sept. 1 deadline, and what natural resources will be covered.

Brando Benefei, chair of the EU Parliament Delegation for relations with the U.S., asked Weyand if she could "provide precise information on when the U.S. will effectively cut tariffs." He said that the reimbursement of the auto tariffs collected since August are "the foundation of the deal." Any delay by the U.S. is a "blatant violation," he said.

On Sept. 2, a reporter asked at an EU press briefing when the commission's patience would be exhausted by the lack of action to partially refund the auto and auto parts tariffs importers paid from Aug. 1 until now on European goods covered by Section 232 auto tariffs.

Chief spokesperson Paula Pinho said: "This is supposed to be applied retroactively, so, in a way, it's not a question of when the U.S. actually triggers the retroactivity, because what counts is it will be retroactive as of the first of August."

The government representatives were asked when the U.S. would be acting, and spokesperson Arianna Podesta said, "It's for the U.S. administration to answer as of the timings of their internal procedures, in any case, the rule will apply as of the first of August."

A reporter followed up: "Are we to take that to mean the commission has been given no guidance on when this update might come?"

Podesta replied, "Of course, we count on the U.S. authorities making the necessary changes, but no, we don't discuss the exact steps they have to take in their national administration, how many hours and days it will take." She said what matters is that it will be retroactive to Aug. 1.

The USTR press office hasn't answered repeated questions over several days on whether the U.S. agrees that the EU action means the tariff reduction for autos and auto parts will be retroactive to Aug. 1. A White House spokesperson said he would ask for clarity on that, then never followed up, even after follow-up questions on subsequent days.

Bernd Lange, the EU Parliament chair of the Committee on International Trade, said in a press conference preceding the committee meeting that the "whole so-called deal is not really a deal." Contrary to the security and predictability promised by EU Commissioner Ursula von der Leyen, he said, looking back on the month of August, "I can say there is no security and predictability." He complained that the U.S. expanded the scope of its steel and aluminum tariffs "two weeks after the so-called deal" to include 407 new products. He mentioned windmills, pumps and motorcycles. "So why should we give zero tariff for U.S. motorbikes, knowing that now our producers have to pay not only the 15%," but also 50% on the value of steel in the product.

But in the committee hearing, Weyand said that the tariff eliminations on the one-third of industrial goods that still faced tariffs are "not a high price to pay for what we have gotten in return."

During the committee meeting, Lange said that the EU is beholden to the current trade deal with the U.S. because of its dependence on U.S. security: "The United States made pressure specifically regarding Ukraine to accept this unbalanced deal."

Irish MEP Nina Carberry noted that spirits have not received an exemption to U.S. duties and asked Weyand if she foresaw "any leeway" on such an exemption. French MEP Thierry Mariani said that EU spirits traders are "already living a catastrophe" under U.S. tariffs. He said the duties "are not a fairy tale," and that Europe is paying "very much" for its reliance on the U.S.

Lange suggested that members of Parliament would want to change the tariff rate quota terms for agricultural exports, and also suggested that it makes sense to take time to debate, given the uncertain legal outlook for the tariffs in the U.S.

"Let's see what the Supreme Court will have to say," he said. "And I assume that there will be some negotiations necessary from the U.S. side as well. So this is an ongoing process. This is not a legally binding and fixed, normal trade agreement."