EU holds cards when negotiating with Trump on tariffs, says ex-WTO chief Lamy

The EU holds several cards when it comes to negotiating its way out of economically harmful tariffs, former head of the WTO, Pascal Lamy has told Euronews' Europe Conversation.

Brussels has been preparing for the likelihood of a second Trump term for several months ahead of his election, with the spectre of trade tariffs central to such preparations.

“They've been thinking about that for months. I mean, the notion that Trump would be president of the US appeared, unfortunately, in my view, quite some time ago,” said Lamy, who also served as EU Commissioner for Trade.

“There is a range of issues where we probably could open an interesting trans-Atlantic negotiation” which would allow Brussels to prevent the application of tariffs, he said.

One example he cited is potentially lowering the tariffs for US cars into the EU – a sector Trump has continuously mentioned.

Here “he’s got a crappy argument, and he's got a reasonable argument”, according to Lamy.

“The crappy argument is ‘there are plenty of Mercedes in in New York, zero Chevrolets in Berlin. This is a problem'," he said, adding: "Unless there are an equal number of Chevrolets in Berlin as Mercedes in New York it’s a problem for Trump according to his ‘crappy argument'."

However, "where he's right is that the EU has an import tariff for cars of 10%, and the US has an import tariff for cars at 3%.

“So maybe we could accept a 5% or 6% or 7% or 8% tariff in the US, if they accept to lower their tariffs on things which we would like to export more to the US and which are not in his mind as a big problem," said Lamy.

Trump gave an almost immediate reprieve of one month to Mexico and Canada after he announced 25% tariffs on both countries. It followed an agreement by each to bolster their borders amid the fight against the illegal migration and the importation of synthetic drug fentanyl.

China retaliated with relatively minor tariffs after his announcement to target Beijing on Sunday alongside Canada and Mexico.

China said it would apply 15% on US liquid natural gas and coal and an anti-monopoly investigation into Google.

If negotiations between the EU and US on tariffs fail, Lamy said the EU should retaliate, which will have implications for US exporters.

"We have the means to retaliate because we have a large market and US exporters of a number of products will have problems if we retaliate," he said.