EU and US work on agreement without import duties: “Political will present”

According to the German State Secretary of Finance, a trading deal between the European Union and the United States in which industrial products are exempt from import duties would be the most efficient scenario. He sees it as the most rational path for both economies. This is certainly in times of tensions about mutual trade.

Political will on both sides

Kukies spoke about this during the spring meeting of the International Monetary Fund in Washington. According to him, the conversations between the EU and the US are constructive and realistic enough. This makes it possible to reach an agreement within 90 days of negotiating period, set by President Trump.

According to Kukies, the conversations are in a good atmosphere. Yet, according to him, there is still a lot of work to do. There are countless details that must be worked out. According to him, the willingness to reach an agreement is present on both sides of the Atlantic Ocean.

Kukies pointed out that an agreement on lower rates does not automatically become reality. After all, the American congress has the last word. “That brings uncertainty, because it is not in the hands of the people at the negotiating table,” he said.

Economic advantage for both blocks

A deal in which industrial rates are abolished would be a clear step forward. Especially with a view to strengthening the transatlantic trade relationship. Both European and American companies would improve their export position and lower costs. According to economists, that can continue to work in investments and employment.

Now that geopolitical tensions increase and trade barriers are increasing worldwide, an agreement between two of the largest economic blocks could work as a signal. A direction in which rates go down instead of up, according to Kukies, the markets would give confidence.

Central banks are currently maneuvering between slowing down inflation and supporting economic growth. The American Federal Reserve (FED) recently received extra pressure from outside. Certainly since Trump, chairman Jerome Powell, criticized because he thought that he is too slow. This cautious setup makes markets extra alert to signs of stability, such as a trade agreement between the EU and the US.