Transatlantic Trade: EU Push for Services Rebalance & Tariff Solutions

Transatlantic economic relations are navigating a complex phase as the European Union intensifies its efforts to rebalance trade with the United States, particularly concerning the services sector. This strategic push comes amidst ongoing negotiations aimed at mitigating the impact of US tariffs, with France playing a prominent role in advocating for a more assertive European stance.

• The EU is actively seeking to rebalance its trade relationship with the United States, with a particular focus on the services sector where it currently faces a deficit.
• France, led by President Emmanuel Macron, advocates for a more robust European posture in trade negotiations, emphasizing the need for the EU to project strength.
• The European Union has a pre-approved package of countermeasures valued at €95 billion targeting US products, held in readiness for immediate implementation if negotiations falter.
• Discussions are ongoing with the U.S. to secure exemptions from a 15% US tariff on EU imports, with the aerospace sector already granted exclusions.
• France is specifically lobbying for the exemption of wine and spirits, a significant export category, alongside agreements for zero-for-zero tariffs on various chemicals, generic drugs, and semiconductor equipment.

France’s Assertive Stance on Trade Rebalancing

French President Emmanuel Macron has underscored the necessity for the EU to project strength in trade discussions, stating, “To be free, one must be feared. We haven’t been feared enough.” This philosophy underpins France’s consistent call for “relentless efforts to rebalance trade, particularly in the services sector,” where the EU currently experiences a trade deficit with the US. Paris has proactively championed the potential deployment of the anti-coercion instrument, an EU mechanism designed to deny foreign entities access to public procurement, licenses, or intellectual property rights, specifically targeting services.

EU’s Strategic Approach: Negotiation and Preparedness

The broader EU strategy involves a dual approach encompassing both negotiation and a readiness for countermeasures. While EU Commission President Ursula von der Leyen continues discussions with US President Donald Trump to secure exemptions from a 15% US tariff on EU imports, the EU maintains a pre-approved package of countermeasures valued at €95 billion targeting US products. These measures, initially agreed upon for implementation on August 4, were conditionally suspended pending a US executive order confirming the 15% blanket tariff as of August 1. EU officials have affirmed that these approved measures remain on standby for immediate implementation should negotiations not yield satisfactory results.

Progress on Exemptions and Sectoral Agreements

Significant progress has been reported in securing exemptions for key European industries. The aerospace sector, deemed strategic by Paris, has notably been granted exemptions. France is also actively pressing for the exclusion of wine and spirits, a leading export market to the US for the country. Beyond these, agreements include the application of zero-for-zero tariffs on specific categories such as certain chemicals, generic drugs, semiconductor-making equipment, select agricultural products (excluding sensitive items like beef, rice, and poultry), some natural resources, and critical raw materials. French Economy Minister Éric Lombard indicated that negotiations for further sectoral exemptions, including wine and spirits, are ongoing.

This intricate negotiation process highlights the EU’s unwavering commitment to safeguarding its economic interests and fostering a more equitable transatlantic trade relationship. The outcome will significantly shape the future trajectory of EU-US commercial engagement.