BRUSSELS: European Commission President Ursula von der Leyen said on Monday the EU had offered the United States a bilateral tariff exemption for cars and other industrial goods as it works to avert an all-out transatlantic trade war.
“We stand ready to negotiate with the United States. Indeed, we have offered zero-for-zero tariffs for industrial goods, as we have successfully done with many other trading partners,” she said.
“The offer was made long before and repeatedly, for example, in automotive sector,” she said, without providing a precise timeline.
She added that “there was not an adequate reaction” from Washington.
“Europe is always ready for a good deal. So, we keep it on the table,” she said.
The commission later clarified that the offer was part of the ongoing negotiations between EU trade chief Maros Sefcovic and the US authorities.
Von der Leyen repeated Europe’s threat that should negotiations fail, the commission was “prepared to respond through countermeasures and defend our interests”.
She also vowed the EU would protect itself from a flow of cheap goods into bloc, especially from China, in an expected indirect impact from Trump’s extra levies.
Billionaire US presidential adviser Elon Musk sparked confusion at the weekend when he said he hoped Europe and the United States would agree to join in a free-trade zone — days after US leader Donald Trump unleashed heavy global trade tariffs.
Europe’s reaction to Musk’s comments was mixed on Monday, with French Trade Minister Laurent Saint-Martin describing it as “a great idea” before talks with his EU counterparts in Luxembourg.
Italian Foreign Minister Antonio Tajani went further, describing how his “dream is to have a transatlantic European market that is a single market where there are no tariffs”.
But Germany, the EU’s biggest economy, poured cold water on the idea and suggested Musk was motivated by fear that trade turmoil would hurt his companies including Tesla.
“If he has something to say, he should go to his president and say, ‘before we talk about zero tariffs, let’s stop the nonsense, the mess you have just made in the last week’. So this is ridiculous,” German Economy Minister Robert Habeck said.
Stocks sink again as Trump holds firm on tariffs
Stock markets and oil prices collapsed further on a black Monday for markets as Trump stood firm over his tariffs despite recession fears.
Trading floors across the globe were overcome by waves of further selling after last week’s sharp losses, with Trump telling Americans to “be strong, courageous, and patient,” minutes before the New York stock market opened to drops of over three percent.
Hong Kong collapsed by 13.2 percent in its worst day in nearly three decades.
Trillions of dollars have been wiped off combined stock market valuations in recent sessions.
Taipei stocks suffered their worst fall on record Monday, tanking 9.7 percent, while Tokyo closed down by almost eight percent.
Frankfurt fell as much as 10 percent in early trading before paring back losses to trade around 4.6 percent lower in afternoon deals.
Bitcoin tumbled while the dollar was mixed after sharp losses last week.
“The carnage in global equity markets has continued,” said Thomas Mathews, Asia Pacific head of markets at Capital Economics.
He said Trump could still pare back his tariffs.
“But, if he doesn’t, equities could get a lot sicker yet.”
A 10-percent “baseline” tariff on imports from around the world took effect Saturday.
A slew of countries will be hit by higher duties from Wednesday, with levies of 34 percent for Chinese goods and 20 percent for EU products.
Beijing announced last week its own 34-percent tariff on US goods, which will come into effect on Thursday.
Canada on Monday launched a WTO complaint against US auto tariffs.
The EU said it had made an offer to the United States for the two sides to have zero tariffs on cars and other industrial goods, while Tokyo agreed to more talks with Washington.
Hopes that the US president would rethink his policy in light of the turmoil were dashed Sunday when he said he would not make a deal with other countries unless trade deficits were solved.
“Sometimes you have to take medicine to fix something,” he said of the ructions that have wiped trillions of dollars off company valuations, which impacts the retirement savings of a large number of Americans.
On Monday, Trump told Americans “Don’t be Weak! Don’t be Stupid!… Be Strong, Courageous, and Patient, and GREATNESS will be the result!”
In a letter to shareholders, JPMorgan Chase CEO Jamie Dimon warned that Trump’s broad tariffs “will likely increase inflation”.
“Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” Dimon said, concluding that “the recent tariffs will likely increase inflation.”
With the start of the first quarter earnings reports, the market is likely to get a flurry of updated outlooks by companies that could further dampen sentiment.
Monday’s savage selling was across the board, with no sector spared.
Tech firms, carmakers, banks, casinos and energy firms all felt the pain as investors abandoned riskier assets.
Concerns about future energy demand saw oil prices sink as much as three percent, having dropped some seven percent Friday.
Both main contracts hit their lowest levels since 2021.
The Kremlin said it was monitoring the plummeting price of oil — on which Russia’s economy is highly dependent.
