On April 7, 2025, the European Commission responded to newly imposed tariffs by the United States by proposing a "zero-for-zero" tariff agreement covering all industrial goods. The offer, announced by European Commission President Ursula von der Leyen, comes amid escalating trade tensions following President Donald Trump's decision to impose a 20% tariff on nearly all European imports and separate 25% duties on steel, aluminum, and cars.

Key takeaways from the European Commission's proposal

“Europe is always ready for a good deal”

With this statement, Ursula von der Leyen reaffirmed the EU's readiness to negotiate a comprehensive agreement to eliminate mutual tariffs on industrial products — from automobiles to chemicals and machinery. EU Trade Commissioner Maroš Šefčovič confirmed that the offer applies to all industrial sectors and reiterated that the EU prefers a negotiated solution over retaliatory action.

Risks of a large-scale trade war

The newly announced US tariffs triggered a sharp decline in financial markets across Europe and the US, with indices experiencing their steepest drop since the onset of the COVID-19 pandemic. EU trade ministers convened in Luxembourg to discuss a coordinated response, with many emphasizing diplomacy, while also supporting a framework for countermeasures if negotiations fail.

Prepared for counteraction

The European Commission plans to begin imposing retaliatory tariffs starting April 15, with a broader package expected by the end of the month. The EU may also activate its Anti-Coercion Instrument, allowing restrictions on US companies’ access to public procurement or new regulatory measures to protect the single market.

What does this mean for the economy and the investment climate?

A potential EU-US agreement to eliminate tariffs on industrial goods could result in:

• Improved access to global markets, especially for sectors such as automotive, electronics, and machinery;
• Lower production costs, particularly beneficial for export-oriented companies within the EU, including in Bulgaria;
• Greater investment predictability, reducing uncertainty for international investors by easing trade restrictions.

Potential impact on the Ruse region

As an industrial and logistics hub, Ruse is strategically positioned to benefit from any EU-US agreement. The region boasts a well-established manufacturing base and active international companies, including exporters beyond the EU. The removal of trade barriers could ease operations for existing businesses and attract new investors seeking access to both European and US markets from a strategic Eastern European location.

Sources: Politico, Euronews, Reuters, April 7, 2025

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