EU clash looms

Key EU clash looms over Trump trade deal

The U.S. president’s threat to hike tariffs on European autos supports the judgment of a majority of EU lawmakers that he can’t be trusted.

By Camille Gijs and Carlo Martuscelli

 U.S. President Donald Trump’s latest tariff threats are pushing EU talks on implementing last year’s transatlantic trade deal toward a showdown.

Negotiators from the EU Parliament, capitals and the Commission will try to thrash out their differences Wednesday amid a deepening impasse over whether to back the accord, struck last July at Trump’s golf resort in Turnberry, Scotland.

Many member countries, led by Germany and its powerful auto industry, along with Trade Commissioner Maroš Šefčovič, are desperate to finally get the deal on the books.

But a majority on the left side of the house, led by trade committee chair Bernd Lange, says that Trump’s warning last Friday that he would slap a 25 percent tariff on European autos confirms their view that the U.S. president can’t be trusted.

“We have said it from the start and we will keep on repeating it: Turnberry is a bad deal and we won't rubber-stamp it,” said Kathleen Van Brempt, the Belgian vice chair of the trade committee and a political ally of Lange.

The handshake deal was enshrined in a joint statement last August and endorsed without changes by EU member countries in November.

But MEPs balked over Trump’s previous threats to annex Greenland — a Danish territory — and Lange has since emerged effectively as a parallel trade negotiator for the bloc. Under the stewardship of the veteran German Social Democrat, lawmakers backed extra conditions that would stall the deal until Trump cuts steel tariffs, suspend it if he threatens the EU’s territorial integrity, and terminate it before the end of his term.

Without an intra-EU compromise, the deal will remain in limbo. 

In a bid to release the mounting pressure, Šefčovič met with U.S. Trade Representative Jamieson Greer in Paris on Tuesday. But the two sides failed to find an off-ramp in more than an hour of talks; a person briefed on the meeting told POLITICO that Greer didn't take the threat to impose a 25 percent tariff on European cars off the table. The person was granted anonymity to discuss the closed-door talks.

Intra-EU diplomacy

Trump’s latest broadside — which included pulling more than 5,000 troops out of Germany — was timed to apply maximum pressure on the EU in Wednesday’s talks.

But it risks antagonizing lawmakers further and driving other governments toward France, the capital most aligned with Lange in calling for extra safeguards on the deal.  

“We shouldn't react in the heat of the moment, but the timing couldn't be worse,” said one EU diplomat, who was granted anonymity to discuss the closed-door negotiations. 

“MEPs almost have an incentive to harden their stance, unlike us, who have to remain pragmatic,” the diplomat added, referring to the governments of EU members.

Brussels is urging the negotiators to rally behind the deal — and for Trump to respect it.

“We have a deal, and the essence of this deal is prosperity, common rules and reliability,” Commission President Ursula von der Leyen told reporters on Tuesday at an EU-Armenia summit in Yerevan.

While the EU is in the “final stages of implementing the remaining tariff commitments,” she added, “the U.S. has the commitment … where alignment with the agreed ceiling is still outstanding.”

The EU will only complete its side of the bargain when enabling legislation takes effect to finally scrap duties on U.S. industrial goods. The U.S. has already committed to a broad tariff cap of 15 percent — with Trump’s threat on auto tariffs running counter to that.

The “deal is a deal” mantra from the Commission has, however, been challenged by the sheer pace of change since Turnberry. Critically, the legal basis for the deal, and Trump’s ability to discriminate against America’s trade partners, has been undermined by the U.S. Supreme Court’s decision in February to strike down most of his original tariffs.  

“The lesson, since this agreement was struck, is that a deal today is not always a deal tomorrow, and that is where, for me, the fundamental difficulty lies,” Belgian Foreign Minister Maxime Prévot, who oversees trade policy, told POLITICO. 

Hurrying up

While Lange rallied a parliamentary majority for the amendments now on the negotiating table, he faces a challenge from Manfred Weber, leader of the pro-deal center-right European People’s Party, the largest bloc in the EU Parliament.

Weber backs the original deal and is even considering forcing a vote on it in June.

“From our side, negotiations must be concluded swiftly so that the agreement can finally enter into force,” Weber told POLITICO after Trump’s threats on Friday. “Our businesses cannot afford any prolonged uncertainty.”

Several member states share this sense of urgency.

Berlin in particular opposes adding any new conditions that could antagonize Trump. 

Trump is “a bit disappointed that we in the EU have not yet finalized the Turnberry deal — frankly, rightly so,” Merz said on Sunday night, in a rushed attempt at damage control after Trump’s troop-withdrawal announcement.

Other countries, like Spain, are at least open to introducing an expiry date for the deal — the so-called sunset clause — but want it to kick in only after Trump leaves office. The Parliament wants the Turnberry deal to expire in March 2028, 10 months before Trump is due to step down.

France, meanwhile, is staking out the middle ground between the Parliament’s hawkish stance and Germany’s more accommodating position, two EU diplomats said.

“Agreements have been signed and must be honored; if they were called into question, it would reopen everything,” said President Emmanuel Macron, who was also in Yerevan.

“If a country is threatened with fresh tariffs, the EU has the tools to respond, and should use them, because that’s what they are for. So yes, everything is on the table.”