The EU can solve the tariff showdown ‘very quickly’ by spending an extra $56 billion on American products

EU nations could commit to spending an extra $56 billion on American products to end the tariff showdown with US President Donald Trump, EU Trade Commissioner Maros Sefcovic said in an interview with the Financial Times published Thursday.

Sefcovic, who has been leading negotiations with the US administration, said that “certain progress” had been made but the European Union would not accept the United States’ 10 percent tariff on EU goods.

Sefcovic said that once US services are taken into account, the US trade deficit with the 27 EU nations is about 50 billion euros ($56 billion) a year.

“If what we are looking at as a problem in the deficit is €50 billion, I believe that we can really  . . .  solve this problem very quickly through LNG (Liquefied Natural Gas) purchases, through some agricultural products like soyabeans, or other areas,”  the commissioner told the FT.

Trump has said the deficit is several hundred billion dollars a year and has imposed a 25 percent tariff on EU-made cars, aluminium and steel. Other goods have a 10 percent tariff.

The US president originally imposed a 20 percent tariff on EU goods but this has been suspended until July and negotiators are now seeking to avoid a full trade war over the tariffs if this level comes into force.

Sefcovic said that even a 10 percent base tariff would be a “very high” level that the EU could not accept.

The commissioner said that while the two sides had a greater understanding of the other’s position, it would still be “very difficult” to reach a deal that was “clearly good and acceptable for our member states and our European parliament”.

This story was originally featured on Fortune.com

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