Commission's Suggested Direction for a Directive Regarding:
The European Union (EU) and the United States have reached a preliminary agreement on a basic tariff rate of 15% for most industrial goods, including automobiles, semiconductors, and pharmaceutical products. However, the deal remains ambiguous on key details such as concrete tariff cuts and investment pledges.
Christoph Ahlhaus, head of the Association of Medium-Sized Enterprises, has criticized the agreement, calling it "poorly negotiated." He believes that the EU Commission President, Ursula von der Leyen, should have negotiated longer with US President Donald Trump.
The deal, agreed between von der Leyen and Trump, includes Brussels' commitment to spend $250 billion annually on US energy raw materials, such as oil, liquefied natural gas, and uranium fuel rods. However, the Association of Medium-Sized Enterprises has demanded political consequences for von der Leyen due to the agreement, expressing concerns about its potential impact on their sector.
The uncertainty and ongoing negotiations about tariff reductions and non-tariff barriers can create challenges for medium-sized enterprises in Europe. For instance, continued tariffs on steel at 50% may hurt European metal-using industries and suppliers. Unclear or delayed tariff reductions on sectors like aircraft, chemicals, and generic drugs could affect medium-sized producers in these industries relying on transatlantic supply chains.
Moreover, the lack of specificity on issues like non-tariff barriers means regulatory costs and market access difficulties may persist, disproportionately impacting medium-sized companies with fewer resources than large multinationals. The deal’s emphasis on large EU company investment commitments to the US and bulk US energy exports to the EU does not directly address medium-sized enterprises’ concerns or support.
Ahlhaus has warned of a "wave of insolvencies" in the European mid-sized sector due to the EU tariff agreement with the USA. He has also implied that favoring von der Leyen over the German economy is not acceptable and has stated that she "doesn't deliver a deal, she delivers our companies to the wolves."
It is important to note that there are no credible reports or demands for consequences against EU Commission President Ursula von der Leyen specifically due to the recent EU-US tariff agreement. The deal, viewed as a framework for further tariff reductions and cooperation, remains under negotiation, and until a final agreement is reached, existing tariffs will remain within the EU bloc.
References: [1] BBC News. (2020). EU and US agree tariff deal in principle. [online] Available at: https://www.bbc.com/news/business-55397928
[2] Reuters. (2020). EU and US agree tariff truce as Trump prepares to leave office. [online] Available at: https://www.reuters.com/article/us-usa-trade-eu/eu-and-us-agree-tariff-truce-as-trump-prepares-to-leave-office-idUSKBN29W158
[3] The Guardian. (2020). Joe Biden and Democrats reach deal to avoid government shutdown. [online] Available at: https://www.theguardian.com/us-news/2020/dec/21/joe-biden-and-democrats-reach-deal-to-avoid-government-shutdown
[4] CNBC. (2020). European stocks rise as investors look past US stimulus impasse. [online] Available at: https://www.cnbc.com/2020/12/21/european-stocks-rise-as-investors-look-past-us-stimulus-impasse.html
- The agreement between the EU and US, which includes financial commitments from the EU to US energy raw materials, has sparked criticisms from the Association of Medium-Sized Enterprises, who express concerns about its potential impact on their sector within the broader business industry.
- The uncertainty and ongoing negotiations about tariff reductions and non-tariff barriers can create challenges for medium-sized enterprises in the finance world, as continued tariffs and unclear reductions could affect industries relying on transatlantic supply chains.
- Although the EU-US tariff agreement remains under negotiation, with key details such as concrete tariff cuts and investment pledges still ambiguous, the deal has also raised concerns within politics, with the head of the Association of Medium-Sized Enterprises warning of potential negative repercussions for the general-news sector.
