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EU proposes ‘zero-for-zero’ tariff deal amid escalating trade tensions with Trump administration

April 7, 2025

19:34

European Commission President Ursula von der Leyen and US President Donald Trump
European Commission President Ursula von der Leyen and US President Donald Trump

Brussels signals openness to industrial tariff removal, warns of possible countermeasures

The European Union is extending an olive branch to the United States in an attempt to avert a full-blown trade war. Following the Trump administration’s move to impose sweeping tariffs on foreign goods, Brussels has floated a “zero-for-zero” tariff arrangement — a proposal to mutually eliminate duties on a range of industrial products.

“We have offered zero-for-zero tariffs for industrial goods as we have successfully done with many other trading partners,” said European Commission President Ursula von der Leyen on Monday during a press conference held alongside Norwegian Prime Minister Jonas Gahr Støre.

“Because Europe is always ready for a good deal. So we keep it on the table,” she added, underscoring the EU’s intent to negotiate while keeping all options open.

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EU signals willingness to negotiate — and retaliate if needed

President von der Leyen made clear that Brussels is prepared to engage constructively with Washington but warned of potential countermeasures if diplomacy falters.

“We stand ready to negotiate with the US,” she said. “We are also prepared to respond through countermeasures and defend our interests.”

The zero-for-zero proposal would apply to a broad array of industrial goods, including chemicals, pharmaceuticals, rubber, plastic machinery, and automobiles, according to EU Trade Commissioner Maroš Šefčovič.

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However, officials in Brussels have not ruled out retaliatory action in response to earlier U.S. tariffs — including a 25% levy on European steel and aluminum that remains in place.

Global markets react to mounting trade uncertainty

Global equity markets continued to show signs of stress amid escalating protectionist policies from the Trump administration. Stocks initially plunged Monday morning before paring losses in part due to the EU’s conciliatory tone.

The STOXX Europe 600 index, a broad gauge of European stocks, dropped as much as 6% before rebounding to close down 2.9%.

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Tensions have soared since President Trump announced a 10% global baseline tariff on April 2, branding it “Liberation Day” for American manufacturing. Additional levies — including a 25% tariff on all foreign-manufactured automobiles — are slated to take effect April 9.

Industry voices call for de-escalation

Among those calling for a de-escalation of trade tensions is Elon Musk, who now heads the U.S. Department of Government Efficiency in addition to leading Tesla and SpaceX.

“I’m hopeful that the United States and Europe will move into a zero-tariff situation,” Musk said over the weekend. “I hope that the United States and Europe can establish a very close partnership — effectively creating a free-trade zone between Europe and North America.”

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A missed opportunity revisited

The latest EU overture echoes efforts made nearly a decade ago under President Barack Obama. Negotiations for the Transatlantic Trade and Investment Partnership (TTIP), a proposed free-trade agreement between the U.S. and EU, nearly succeeded before collapsing in 2016.

Talks were derailed following leaked documents published by Greenpeace, which sparked a backlash over regulatory differences — particularly concerning environmental standards and food safety.

Formal negotiations ended in 2019 during Trump’s first term, but the EU’s latest proposal signals a potential reopening of trade dialogue. Whether the Trump administration will reciprocate remains to be seen.

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