EU keeps U.S. trade deal frozen over tariff uncertainty

The EU-U.S. trade deal was initially struck last summer, with the U.S. agreeing to a 15 per cent tariff rate on most exports and the EU vowing to remove tariffs on most American goods Photo by KENZO TRIBOUILLARD/AFP via Getty Images

Article content

The European Union’strade deal with the United States will stay frozen after the European Parliament decided to keep its ratification paused in the wake of a court ruling invalidating President Donald Trump’s global tariffs.

Article content

Top EU lawmakers on the parliament’s trade committee made the choice on Wednesday, saying they wanted more information from Washington about how it will preserve a 15 per cent ceiling on most EU products — a level both sides agreed to in last summer’s trade pact. Parliament initially halted ratification several days after the ruling.

Article content

Article content

Article content

“We will communicate towards the U.S. we want to have clarity that they are sticking to the deal,” Bernd Lange, who chairs parliament’s trade committee and is leading negotiations on the issue, told Bloomberg News.

Article content

Article content

Lange added that EU lawmakers will also seek more specifics on the trade deal’s status next Tuesday from the European Commission, which handles trade for the bloc. They will then reconvene on March 17 to decide whether to move forward with ratification, which could happen later that week.

Article content

The ongoing delay is the latest sign of turbulence in the transatlantic trade relationship, which was also jolted Tuesday night when Trump threatened to cut off all trade with Spain over its refusal to let the U.S. use local bases to attack Iran. The provocation has injected even more uncertainty into the U.S.-EU deal.

Article content

Trump’s trade arrangements were thrown into disarray last month after the Supreme Court struck down the legal basis for his so-called reciprocal tariffs, which he had used to set rates on countries around the world. Since the ruling, the Trump administration has installed temporary 10 per cent tariffs on all imports, while it conducts investigations under U.S. Trade Representative Jamieson Greer’s Section 301 authority to create more permanent levies.

Article content

Article content

Greer has said the goal is to ultimately recreate rates the U.S. agreed to with the EU and others under previous deals, but many questions remain over how the administration will do that. For now, the EU expects to be exempt from Trump’s plans to increase his temporary tariffs to 15 per cent, Bloomberg reported.

Article content

Article content

While EU lawmakers have held back final approval of the U.S. deal, the commission, the EU’s executive arm, and prominent EU leaders like German Chancellor Friedrich Merz have urged parliament to swiftly ratify the pact, arguing it will help avoid further trade tensions with a U.S. president who frequently berates the EU.

Article content

“We want this agreement to last, and I have gained the impression that the president and his staff see it that way,” Merz told reporters after meeting with Trump in DC on Tuesday.

Article content

Article content

But Trump also dropped a surprise during his public appearance with Merz, threatening to bar all Spanish products. The remarks reflected a deepening rift between Trump and Spain, which has emerged as one of the president’s most pointed critics.

Article content

Spanish Prime Minister Pedro Sánchez refused to back down on Wednesday morning, reiterating his argument that the U.S. and Israeli assault on Iran is illegal.