Brussels prepares tariff reduction for the USA

Brussels – The European Commission plans to present a legislative proposal on Wednesday to reduce EU tariffs on industrial goods from the US to zero. The aim is to achieve a reduction in the US auto tariffs from the current 27.5 percent to 15 percent, retroactively as of August 1. This is reported by the "Handelsblatt" newspaper, citing EU diplomats and industry circles. The chairman of the EU Trade Committee, Bernd Lange (SPD), also confirmed to the "Handelsblatt" that the Commission will submit a corresponding legislative proposal on Wednesday. The US was originally supposed to reduce its auto tariffs when the flat 15 percent tariff came into effect on August 1. US President Donald Trump and EU Commission President Ursula von der Leyen agreed on this at a meeting in Scotland at the end of July. The EU had also promised its own tariff reductions, but wanted to link these to a more comprehensive trade agreement. For German automakers BMW, Mercedes, and Volkswagen, the regulation now brings clarity after weeks of uncertainty – albeit under worse conditions than before. For decades, EU manufacturers only had to pay a 2.5 percent tariff on car exports to the US, while US exports to Europe were subject to ten percent. The German auto industry has recently expressed cautious optimism. On Thursday, the EU and the US clarified their tariff deal in a joint statement. The US side attached conditions to the reduction of car tariffs from the current 27.5 percent to 15 percent. The VW Group welcomed the move as an important contribution to greater planning security. Hildegard Müller, President of the German Association of the Automotive Industry (VDA), recently stated: "The long-term goal must be to return to a lower tariff rate."