The European Union is likely to get a worse trade deal with Donald Trump than the UK, according to diplomatic sources. Brussels and Washington are still locked in talks, but a “temporary” deal is expected to be announced in the coming days.
The agreement is expected to see a baseline reciprocal 10% levy imposed on imports, which is the same rate the UK was able to negotiate. However, in a major blow for Brussels, EU negotiators have failed to win any “sectoral” concessions – unlike the UK. Downing Street negotiators were able to secure tariff free trade for UK exports of steel and aluminium.
Britain was also granted an annual quota of 100,000 cars at a 10% tariff, in a big boost for UK-based automotive manufacturers. This represents a considerable discount from the 25% levy that other exporters will have to pay.
The UK was quick out of the blocks to start trade talks with the Trump administration following the so-called “liberation Day” in April. In June, Trump signed off on a deal agreed in May during the G7 summit in Canada, saying the UK would have protection against future tariffs “because I like them”.
The deal was derided by EU officials and diplomats, who said the UK had acted too hastily and negotiated bad terms for itself.
The EU was confident that the size of its market would give it more leverage in trade talks with Trump.
However, those hopes appear to have been dashed for the time being, with the bloc ruing its approach to the negotiations. A diplomat told the Financial Times: “The UK agreement was better than this. It’s a surprise given how long we have negotiated.”
Bernard Arnault – the chief executive of LVMH – praised the UK saying in May London had “negotiated well”, while Brussels had got off to a “bad start”. The White House hailed the “historic” deal, claiming it would provide unprecedented access to British markets for US firms.
The US will be able to export a tariff-free quota of 13,000 tonnes of beef and 1.4 billion litres of bioethanol. Downing Street has also promised to take into account White House concerns over the use of Chinese supply lines by UK companies.
