EU-US trade talks: Differences can and need to be resolved - ANZ

Confirmation that there will be no punitive tariffs on EU exports to the US is needed to reverse the slump in investor confidence and expectations towards the euro area, according to Brian Martin, Research Analyst at ANZ.

Key Quotes

“Germany appears to agree with Washington and advocates a new (fairer) trade deal covering industrial goods. That would result in lower tariffs and higher trade rather than vice versa, but other EU countries are less enthusiastic.”

“A solution to the current trade impasse could involve some (temporary) introduction of quotas for EU steel and aluminium exports to the US, which amounted to EUR6.4bn last year. That would allow more extensive trade talks to take place.”

“The EU has said that it will not negotiate with a gun held to its head. The US says that it will not delay tariffs indefinitely (1 June). The nominal differences could actually be quite small (EUR640m). But emotions appear high and these need to be overcome.”