BERLIN: German Chancellor Friedrich Merz on Thursday urged the European Union to strike a “quick and simple” deal with the United States on tariffs, warning that a failure to resolve the dispute ahead of next week’s deadline could push the bloc closer to a damaging trade war.
“It is better to achieve a quick and simple solution than a lengthy and complicated one that remains in the negotiation stage for months,” Merz said in Berlin, at a time when EU trade chief Maros Sefcovic is in Washington seeking to seal an agreement.
Merz said a quick deal was needed “to remove the burden of tariffs on our businesses, which are far too high”.
He added that the current talks are “not about a minutely detailed trade deal” but “the quick resolution of a tariff dispute”.
A speedy agreement was needed, he said, “in particular for our country’s key industries: chemicals, pharmaceuticals, mechanical engineering, aluminium, steel, automobiles”.
The EU has until Wednesday next week to reach a deal or see swingeing US tariffs kick in on a majority of its goods.
If no agreement is reached, the United States has said it will impose an additional 20 percent on the EU on top of a base rate of 10 percent.
If no agreement is reached, the default tariff on EU imports is expected to double to 20 percent or even higher — Trump having at one point threatened 50 percent.
Last month, Germany’s central bank warned that Europe’s biggest economy could face two more years of recession if the trade war with the US escalated.
Both sides under pressure
The EU and the US are moving toward an agreement that would take the form of a headline “political understanding” to resolve their tariff dispute before the 9 July deadline, rather than a comprehensive deal, Euro News reported, citing diplomats and an EU official.
The EU and the US are under pressure from the looming 9 July deadline, after which Trump has threatened to impose 50 percent tariffs on EU imports if negotiations fail.
Since mid-March, Washington has implemented a new policy that calls into question its trade relations with partners across the globe. The US currently imposes tariffs of 50 percent on EU steel and aluminium, 25 percent on cars, and 10 percent on all EU imports.
After weeks of fruitless discussions, negotiations between the European Commission — which holds the mandate to negotiate on behalf of the 27 member states in trade matters — and the Trump administration began in mid-June, but their outcome remains in doubt.
