BRUSSELS — The European Union has proposed a groundbreaking “zero-for-zero” tariff arrangement to the Trump administration following Washington’s imposition of sweeping new import taxes last week, even as it prepares potential retaliatory measures.
EU Extends Olive Branch
European Commission President Ursula von der Leyen announced the proposal Monday, framing it as a mutually beneficial solution to growing transatlantic trade friction.
“We have offered zero-for-zero tariffs for industrial goods, as we’ve successfully done with other partners,” von der Leyen stated during a joint press conference with Norwegian Prime Minister Jonas Gahr Støre.
The deal would eliminate duties on key industrial sectors, including:
- Chemicals and pharmaceuticals
- Rubber and plastic products
- Machinery and automotive goods
“Europe is always ready for a good deal,” von der Leyen emphasized. “We will keep this offer on the table while being prepared to defend our interests through countermeasures if necessary.”
Mounting Trade Tensions
The proposal comes in response to President Trump’s April 2 “Liberation Day” announcement imposing:
- A 10% baseline global tariff
- An additional 25% levy on foreign-made vehicles
- Continued 25% tariffs on steel and aluminum
The measures triggered immediate market turbulence, with Europe’s STOXX 600 index plunging 6% at Monday’s open before recovering to a 2.9% loss following von der Leyen’s comments.
Mixed Signals From Key Players
Elon Musk, serving as the Department of Government Efficiency czar, expressed optimism about resolving the dispute.
“I’m hopeful we can move to a zero-tariff situation,” Musk stated over the weekend, envisioning “a free-trade zone between Europe and North America.”
The proposal echoes the failed Transatlantic Trade and Investment Partnership (TTIP) negotiations from the Obama era, which collapsed in 2019 due to regulatory disagreements and activist opposition.
Potential Roadblocks Ahead
While the EU’s average tariff on U.S. agricultural imports stands at just 1.6%, its 10% duty on American cars remains a sticking point.
EU Trade Commissioner Maroš Šefčovič confirmed the bloc hasn’t ruled out responding to the steel and aluminum tariffs, leaving the door open for further escalation.
As both sides weigh their options, global markets remain jittery, with businesses bracing for disruptions to transatlantic supply chains.
The coming weeks will determine whether this latest proposal can prevent a full-blown trade war between the world’s largest economic partners.
— With reporting from M10News Brussels Bureau
