Spain proposes a trade war compensation fund to the EU, financed by tariffs imposed on the US

Eduardo González The Minister of Economy, Trade, and Enterprise, Carlos Cuerpo, stated this Monday in Brussels that the fund proposed by Spain to compensate the sectors most affected by the trade war with the US "is beginning to be received quite well" in the EU. He defended the idea that this fund should be financed with the tariffs collected by Europe thanks to the tariff countermeasures imposed on US products. “ Well, I think the proposal is starting to sound quite good as we see progress in these negotiations and see the complexity and cumulative impact that European companies and industries affected by the tariffs are already experiencing,” Cuerpo said at the end of the EU Foreign Affairs Council (FAC) meeting in its trade format, which took place just two days after US President Donald Trump threatened to raise tariffs on European products to 30% starting August 1. “It is clear that if we do not reach an agreement” with the US, “we will have to put some mechanism in place, not only thinking about these rebalancing measures with respect to the United States, but also thinking about protecting our industries and companies from the impact,” he continued. "We proposed that a portion of the tariffs that could be collected from the measures imposed on American products be allocated precisely for this purpose," and the European Commissioner for Trade, Maros Sefcovic, "has indicated that this is an option to investigate in the coming weeks to see if we are able, together, to articulate a configuration that can help our companies from the outset," he added. "You know that in Spain, barely twelve hours after these tariffs were put on the table by the American president at the beginning of April, we already had a response plan in place that includes financing but also support with personalized services for the companies themselves to be able to manage both the American market and possible alternative niches," he declared. “Intention to seek an agreement, but without being naive” “The main summary of the discussion we had regarding trade relations between the United States and Europe this morning was one of unity, unity of action, and support for the European Commission's performance in these negotiations, especially with that initial intention to continue seeking an agreement in the two weeks remaining until the deadline we have at the beginning of August,” Cuerpo stated regarding the Brussels meeting. According to the minister, during the FAC meeting it was reported that “contacts will be intensified over the next two weeks.” “In fact, he indicated to us that they have a new videoconference this evening with the Secretary of Commerce, Howard Lutnick, and they will continue traveling, probably over the next few days, and will continue meeting with their American counterparts to make progress and be able to reach this document of agreement in principle. And that is what we are also supporting on the part of the member states: that we move forward and be able to reach that agreement,” he explained. However, he warned, "we cannot be naive and must now consider a scenario in which there is no agreement and, therefore, prepare possible rebalancing measures." "The consensus is in the Commission's own position, and there is unified support for this position regarding moving forward with this definition of the second package, so that both the first package of measures, which affected around €21 billion in US exports, and the second package, which affects around €72 billion, are ready to be used by early August," he added. During the Brussels meeting, the ministers generally supported extending the suspension of the first set of EU countermeasures (additional tariffs on US imports worth around €21 billion) from July 15 to early August, in order to allow more time for negotiations. However, they also addressed preparations for possible additional countermeasures. The Commission could present the relevant proposal or proposals if circumstances so require. In this regard, Carlos Cuerpo explained that "the second package, the complete list of products that could be subject to these tariffs, worth around 72 billion euros on American products, has not yet been circulated to the Member States." "We hope that it will be sent to the Member States later today," he added. Furthermore, the minister highlighted the willingness expressed by his EU counterparts to "expand the network of trading partners," following the agreement reached this Sunday with Indonesia for greater trade cooperation, and welcomed the discussion, which was "quite positive, in general terms, regarding the need to move forward with the ratification of the agreement with Mercosur."

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