TMTPOST -- U.S. Commerce Secretary Howard Lutnick sees digital serive tax and metal trade are among major topic during the coming trade negotiations with the European Union.
Credit：Xinhua News Agency
Lutnick in an interview with CNBC on Tuesday confirmed he had a phone call withe the EU counterparts and expected there is “plenty of horse trading left to do” on the US-EU trade pact. One of a major issue on the table is the digital service tax and the EU is set to discuss steel and aluminium trade, according to the Commerce chief.
“Do I expect to continue to be talking to the European Commission’s trade people? Yeah, they called me this morning to talk about, what are other things to talk about, digital services, taxes and the attack on our tech companies — that is going to be on the table,” Lutnick said. “There are other things that they would like, like steel and aluminum that were not included in this deal that will be on the table,” he added.
Lutnick suggested tariffs on pharmaceuticals and autos would be the major part of the future negotiations with the EU, and stressed pharma tariff policy is the key for the Trump administration. “The key to why the Europeans did the deal is autos and pharmaceuticals,” he said. He continued that the stance that U.S. President Trump had made very clear is “if you’re going to sell here, you’re going to produce here.”
Lutnick believed that it is important for the EU to make the baseline 15% tariff under the deal covers pharmaceuticals because the Trump administration is going to introduce the policy dictating higher pharma tariffs in the next two week. He revealed the coming pharma tariffs are “massive.”
“Basically, if you are not building your plant in America where we pay for pharmaceuticals, you are going to pay a massive tariff, because why should we pay for your drugs?” said Lutnick. “And you make them overseas and you make your money overseas? At least if we’re going to pay for your drugs, you’re going to build them in America.”
Trump, following his meeting with European Commission President Ursula von der Leyen on Sunday, said the U.S. would set a baseline tariff of 15% for most European goods, including automobiles, and the EU had agreed as part of the deal to buy $750 billion of energy products from the U.S. and invest an additional $600 billion in his country.
The White House in a fact sheet on Monday confirmed the EU will eliminate all of tariffs on U.S. industrial goods exported to the bloc, and pay a tariff rate of 15%, including on autos and auto parts, pharmaceuticals, and semiconductors, while the sectoral tariffs on steel, aluminum, and copper will remain unchanged. The EU will purchase $750 billion of U.S. energy exports through 2028, and invest $600 billion in U.S. over Trump's term, per the release.
Von der Leyen on Sunday said the 15% tariff level “is the best we could get”, and the level would cover cars, which were subject to duties of 27.5%, semiconductors and pharmaceuticals, which the Trump administration has not impose any new tariffs yet but signaled extra duties would come on the horizon. Both sides had not taken any decision on tariffs regarding wine and spirits, she added.
The EU and the U.S. are rushing to finish a non-legally binding joint statement before the August 1 deadline and the statement will expand on some of the elements negotiated over the weekend, Bloomberg on Tuesday cited a senior EU official. It was reported that the U.S. will cut tariffs on certain sectors, in particular cars and car parts, once the statement is finalized.
Both sides will then reportedly start work on a legally binding text of a deal, which will need approval from EU member states and maybe the European Parliament. The exact details are still being worked out. It was also said the EU is seeking a quota on metals that would bring down the levies on a certain volume of goods, and also discussing whether some produts like wine and spirits would be exempted from the 15% tariffs.
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