EU’s Sefcovic: Proposed 0 for 0 tariffs on industrial goods
European Union (EU) Trade Commissioner Maros Sefcovic said on Tuesday that they have “proposed 0 for 0 tariffs on industrial goods.”
Key takeaways
- Accelerating trade talks with India among others.
- Another €170B US-exports may be impacted by tariffs.
- Ready to use all available tools in trade defence.
- EU doesn't feel weak or under pressure to accept unfair deal with the US.
- The US tariffs are unfair.
- Everyone wants to accelerate free trade agreements with EU.
- We also need to look at what we can do better inside the single market.
Market reaction
EUR/USD is building on its upbeat momentum following these comments and was last seen adding 0.27% on the day at 1.1344.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
