Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: President Trump pushed back against doubts over his seriousness on
Speaker 2: the tariff deadline. He said the August first deadline won't
Speaker 2: be extended, while hinting on progress towards a deal with
Speaker 2: the European Union. Joining us now to discuss this in
Speaker 2: more detail is John Clark, a former EU trade negotiator
Speaker 2: and Director of International Affairs at the European Commission. John,
Speaker 2: thank you for joining us on such a busy morning
Speaker 2: when it comes to news about trade. How are you
Speaker 2: reading the latest comments from the US and the EU
Speaker 2: on this? Does it sound like they're close to a
Speaker 2: deal to you?
Speaker 3: I think this is the most difficult negotiation in memory,
Speaker 3: frankly for the europan Union, and I would not want to
Speaker 3: be any trade negotiator on this one. The go posts
Speaker 3: are moving all the time, leaves negotiating with a gun
Speaker 3: against its head of twenty percent or fifty percent tariff
Speaker 3: in August, depending on what daily week it is. There
Speaker 3: are doubts I think whether any any deal that Trump
Speaker 3: incs will be actually honored. And then the Commission is
Speaker 3: very divided about whether it should stick to principles not
Speaker 3: accept anything which is w two illegal or be quote
Speaker 3: unquote pragmatic and go for a quick thirty deal of
Speaker 3: the kind that the British did and the end men
Speaker 3: the states are also quite divided, and then we've got
Speaker 3: the whole Ukraine dimension, which which in the background. So
Speaker 3: it's a very difficult situation. There is there's no white
Speaker 3: smoke coming out of the bussles at the moment, but
Speaker 3: there have been a few hints and signs that a
Speaker 3: deal may be reached today or over overnight tomorrow, which
Speaker 3: would basically basically be EU accepting that there will be
Speaker 3: a ten percent tariff more or less across the board,
Speaker 3: carve outs for airbus or aircraft, aerospace and wines and
Speaker 3: spirits the biggest sivily weather that can be a carve out,
Speaker 3: and no tariffs for cars and pharmaceuticals which have been
Speaker 3: almost important to several member states. So this is a
Speaker 3: very difficult negotiation. I think nobody will be happy with
Speaker 3: the result. But I don't think the EU is willing
Speaker 3: to go to a full blown trade war with the
Speaker 3: USA because that would that would end any any prospect
Speaker 3: of the US sticking in there with support for Ukraine.
Speaker 1: You point in some of the complexity of this arrangement.
Speaker 1: We've been speaking to our reporters who've been giving details
Speaker 1: on some of those carveat negotiations that have been happening
Speaker 1: as well. I mean, are those is that going to
Speaker 1: be enough for EU member states? If there are managed
Speaker 1: to be successful on car utes for wine and spirits
Speaker 1: and aircraft parts. As we've been discussing, the car is
Speaker 1: issue seems even more complicated.
Speaker 3: No, I don't think that would that would be be satisfactory.
Speaker 3: The auto sector is very important, The pharmaceutical sectory is
Speaker 3: very important, and I think at least one of those
Speaker 3: sectors would need to get a carve out zero beauty
Speaker 3: exporting to the USA if none of them are there,
Speaker 3: I don't think the EE you could accept a deal.
Speaker 2: That's interesting that you mentioned that Trump did mention that
Speaker 2: two hundred percent tariff that threat on pharmaceuticals, but he
Speaker 2: did mention a longer timeline when he threatened that, saying
Speaker 2: companies will have a year a year and a half
Speaker 2: to move production to avoid that kind of tariff. But
Speaker 2: I want to car maybe dig into a little deeper
Speaker 2: on the auto situation. There were some reporting that some
Speaker 2: German car makers would be given maybe some reprieves such
Speaker 2: as BMW, Mercedes and Volkswagen who produced some cars in
Speaker 2: the US, they'll be given maybe a quota of some
Speaker 2: terraff free imports. What's the latest reading on the discussions
Speaker 2: around the auto sector.
Speaker 3: Well, I'm not privy to the discussions that they're in
Speaker 3: the so called tunnel now in GRN secrecy, but there
Speaker 3: are lots of ways in which you can carve out
Speaker 3: craft a deal on autos which would, as you say,
Speaker 3: involve boosting production in the USA, which you know BMW
Speaker 3: is quite able to do. Volkswagen as well. The Japanese
Speaker 3: have been doing it with Hayundai and offsetting that against
Speaker 3: increased imports from Europe. So I mean anything as possible.
Speaker 1: What about the question of the tech rules. This is
Speaker 1: something that Donald Trump has brought up again and again,
Speaker 1: and even last night while he was saying that the
Speaker 1: EU and Ursula von Zlin had been quote very nice recently,
Speaker 1: he still pointed to some of the fines being issued
Speaker 1: to big tech companies in the from the US, but
Speaker 1: by the EU. Now, our conversations with the European Commission
Speaker 1: have said that they're not looking to change the rules
Speaker 1: Stefan Serjean I told us that only around a week ago.
Speaker 1: Is that something that could a compromise. Do you think
Speaker 1: be found around that where the EU could be seen
Speaker 1: to be giving something on that area to the US
Speaker 1: without necessarily giving up on its framework.
Speaker 3: No, I don't. I think on this the the EU
Speaker 3: will will not waive it's it's legal requirements and its
Speaker 3: enforcement requirements on on on big tech, on on data platforms.
Speaker 3: I mean, only last week the EU find Apple five
Speaker 3: hundred million euros for anti competitive behavior in terms of
Speaker 3: access to its it's it's apps site. I mean, I
Speaker 3: think that's a that's a very clear sign that the
Speaker 3: EU is not going to give up on its the
Speaker 3: Digital Service Act or other tech regulations. I think that
Speaker 3: would be a bridge too far, and it's hard to
Speaker 3: see what kind of sweetheart understanding could be made otherwise.
Speaker 3: So I don't think this area is going to be
Speaker 3: featured very strongly in any EU U S deal.
Speaker 2: Can you talk to us about a little bit about
Speaker 2: how you're viewing, you know, the broader trade situation within
Speaker 2: the EU or sorry outside you with partners other than us.
Speaker 2: Do you think that this is putting more strain on
Speaker 2: their relationship with China, for example.
Speaker 3: Well, that's one of the big, big unknowns that I've
Speaker 3: been writing about quite a bit and commenting on. You know,
Speaker 3: I would be very unhappy if any EU US deal
Speaker 3: included commitments to bash bash China in any kind of
Speaker 3: W two illegal manner. Obviously the US want the EU
Speaker 3: to align with it in hitting China in whatever ways
Speaker 3: it can. That would be very, very unwise and dangerous approach.
Speaker 3: I think the EU should not be forced to choose
Speaker 3: between America and China, not least because we have a
Speaker 3: summit coming up EU China in a few days, and
Speaker 3: I think we don't want to see a breakdown in
Speaker 3: EU China relations at this particular point in time.
Speaker 1: Going back to the negotiations with the US, I'm wondering
Speaker 1: if what you would see as being the red lines
Speaker 1: that the EU won't cross to get a deal. Obviously
Speaker 1: there's a lot of pressure and we're told there is progress.
Speaker 1: But I just wonder, from your experience and negotiating on
Speaker 1: behalf of the EU, what what issues you think that
Speaker 1: could see all of this fall apart over.
Speaker 3: Well, I think there are there are two two red lines,
Speaker 3: perhaps two and a half one is that I don't
Speaker 3: think the European Union would accept to give the USA
Speaker 3: any preferential market access for US exports. That would be
Speaker 3: clearly illegal. And the w t O and the EU does,
Speaker 3: I think still care about its credibility and as a
Speaker 3: defender of multilateralism and the kind of international rules. So
Speaker 3: I think that's that's not going to happen. That that's
Speaker 3: that would be a red line for the European Union.
Speaker 3: I think the second one is, as I said earlier,
Speaker 3: the EU will not, in my opinion, accept a deal
Speaker 3: in which there is no improved access for pharmaceuticals or cars,
Speaker 3: one or the other, perhaps not both, but one or
Speaker 3: the others. I think they will demand good treatment for
Speaker 3: either their farmer or their car exports. And then thirdly
Speaker 3: that the half is that as I said, I don't
Speaker 3: think the EU would accept to agree with the Americans
Speaker 3: any kind of again w two illegal actions against China.
Speaker 1: John, thank you very much for joining us this morning,
Speaker 1: John Clark, their former EU Trade Negotiations director Franchashal Farres
Speaker 1: at the European Commission. We appreciate your insight as we're
Speaker 1: watching for the latest news out of those trade talks.