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President Trump pushed back against doubts over his seriousness on the tariff deadline. He said the August first deadline won't be extended, while hinting on progress towards a deal with the European Union. Joining us now to discuss this in more detail is John Clark, a former EU trade negotiator and Director of International Affairs at the European Commission. John, thank you for joining us on such a busy morning
when it comes to news about trade. How are you reading the latest comments from the US and the EU on this? Does it sound like they're close to a deal to you?
I think this is the most difficult negotiation in memory, frankly for the europan Union, and I would not want to be any trade negotiator on this one. The go posts are moving all the time, leaves negotiating with a gun against its head of twenty percent or fifty percent tariff in August, depending on what daily week it is. There are doubts I think whether any any deal that Trump
incs will be actually honored. And then the Commission is very divided about whether it should stick to principles not accept anything which is w two illegal or be quote unquote pragmatic and go for a quick thirty deal of the kind that the British did and the end men the states are also quite divided, and then we've got the whole Ukraine dimension, which which in the background. So
it's a very difficult situation. There is there's no white smoke coming out of the bussles at the moment, but there have been a few hints and signs that a deal may be reached today or over overnight tomorrow, which would basically basically be EU accepting that there will be a ten percent tariff more or less across the board, carve outs for airbus or aircraft, aerospace and wines and spirits the biggest sivily weather that can be a carve out,
and no tariffs for cars and pharmaceuticals which have been almost important to several member states. So this is a very difficult negotiation. I think nobody will be happy with the result. But I don't think the EU is willing to go to a full blown trade war with the USA because that would that would end any any prospect of the US sticking in there with support for Ukraine.
You point in some of the complexity of this arrangement. We've been speaking to our reporters who've been giving details on some of those carveat negotiations that have been happening as well. I mean, are those is that going to be enough for EU member states? If there are managed to be successful on car utes for wine and spirits and aircraft parts. As we've been discussing, the car is issue seems even more complicated.
No, I don't think that would that would be be satisfactory. The auto sector is very important, The pharmaceutical sectory is very important, and I think at least one of those sectors would need to get a carve out zero beauty exporting to the USA if none of them are there, I don't think the EE you could accept a deal.
That's interesting that you mentioned that Trump did mention that two hundred percent tariff that threat on pharmaceuticals, but he did mention a longer timeline when he threatened that, saying companies will have a year a year and a half to move production to avoid that kind of tariff. But I want to car maybe dig into a little deeper
on the auto situation. There were some reporting that some German car makers would be given maybe some reprieves such as BMW, Mercedes and Volkswagen who produced some cars in the US, they'll be given maybe a quota of some terraff free imports. What's the latest reading on the discussions around the auto sector.
Well, I'm not privy to the discussions that they're in the so called tunnel now in GRN secrecy, but there are lots of ways in which you can carve out craft a deal on autos which would, as you say, involve boosting production in the USA, which you know BMW is quite able to do. Volkswagen as well. The Japanese have been doing it with Hayundai and offsetting that against increased imports from Europe. So I mean anything as possible.
What about the question of the tech rules. This is something that Donald Trump has brought up again and again, and even last night while he was saying that the EU and Ursula von Zlin had been quote very nice recently, he still pointed to some of the fines being issued to big tech companies in the from the US, but by the EU. Now, our conversations with the European Commission have said that they're not looking to change the rules Stefan Serjean I told us that only around a week ago.
Is that something that could a compromise. Do you think be found around that where the EU could be seen to be giving something on that area to the US without necessarily giving up on its framework.
No, I don't. I think on this the the EU will will not waive it's it's legal requirements and its enforcement requirements on on on big tech, on on data platforms. I mean, only last week the EU find Apple five hundred million euros for anti competitive behavior in terms of access to its it's it's apps site. I mean, I think that's a that's a very clear sign that the EU is not going to give up on its the
Digital Service Act or other tech regulations. I think that would be a bridge too far, and it's hard to see what kind of sweetheart understanding could be made otherwise. So I don't think this area is going to be featured very strongly in any EU U S deal.
Can you talk to us about a little bit about how you're viewing, you know, the broader trade situation within the EU or sorry outside you with partners other than us. Do you think that this is putting more strain on their relationship with China, for example.
Well, that's one of the big, big unknowns that I've been writing about quite a bit and commenting on. You know, I would be very unhappy if any EU US deal included commitments to bash bash China in any kind of W two illegal manner. Obviously the US want the EU to align with it in hitting China in whatever ways it can. That would be very, very unwise and dangerous approach.
I think the EU should not be forced to choose between America and China, not least because we have a summit coming up EU China in a few days, and I think we don't want to see a breakdown in EU China relations at this particular point in time.
Going back to the negotiations with the US, I'm wondering if what you would see as being the red lines that the EU won't cross to get a deal. Obviously there's a lot of pressure and we're told there is progress. But I just wonder, from your experience and negotiating on behalf of the EU, what what issues you think that could see all of this fall apart over.
Well, I think there are there are two two red lines, perhaps two and a half one is that I don't think the European Union would accept to give the USA any preferential market access for US exports. That would be clearly illegal. And the w t O and the EU does, I think still care about its credibility and as a defender of multilateralism and the kind of international rules. So I think that's that's not going to happen. That that's that would be a red line for the European Union.
I think the second one is, as I said earlier, the EU will not, in my opinion, accept a deal in which there is no improved access for pharmaceuticals or cars, one or the other, perhaps not both, but one or the others. I think they will demand good treatment for either their farmer or their car exports. And then thirdly that the half is that as I said, I don't think the EU would accept to agree with the Americans any kind of again w two illegal actions against China.
John, thank you very much for joining us this morning, John Clark, their former EU Trade Negotiations director Franchashal Farres at the European Commission. We appreciate your insight as we're watching for the latest news out of those trade talks.