The EU Economic Commissioner, Valdis Dombrovskis, stated on Friday, 25 April 2025, that the United States and the European Union still have work to do to reach a deal that avoids tariffs on each other’s goods.

The US has imposed 25% tariffs on EU cars, steel, and aluminium in March and 20% on other EU goods in April 2025. The tariffs were later reduced to a 20% rate until 8 July 2025, allowing a 90-day window for tariff deal talks. The tariffs were also postponed for 90 days for all countries exporting to the US, except for the tariffs imposed on China.

In response, the EU lifted tariffs on certain US goods and proposed a zero-tariff agreement for all industrial goods between both parties. However, Dombrovskis noted that the US showed only limited interest in the offer.

This followed the announcement by EU Commissioner-Designate Maros Sefcovic, on 20 March 2025, to the Committee on International Trade that the EU’s countermeasures against the US, in response to President Donald Trump’s metals tariffs, would be postponed. The countermeasures, announced on 12 March 2025, will now take effect in mid-April.

“There’s a lot of work ahead to come to more concrete parameters and elements and areas of cooperation which would allow us to avoid the implementation of tariffs,” Dombrovskis said at the International Monetary Fund meetings in Washington.

The US views the EU’s value-added tax as a non-tariff trade barrier, but Dombrovskis stated that the 27-nation bloc disagrees and is unwilling to include it in trade talks, as VAT serves as a crucial source of budget revenue for both European governments and the EU as a whole.

“It’s not a trade barrier at all and it does not belong to the conversation. The value-added tax is a consumption tax, similar to the sales taxes in U.S. states on sales of domestic and imported goods,” he said.

Dombrovskis also asked Chinese officials, including China’s finance minister and central bank governor, in a meeting in Washington, not to flood EU markets with goods redirected from the US, given that the US market is basically closed to China due to 145% tariffs on Chinese goods. He also said that the EU would take action to safeguard its markets if Chinese goods posed a significant threat.

“They showed understanding that this is an issue, that it is a concern for us, but we didn’t enter into what specific measures China would be willing to do to prevent this flooding of the European market,” Dombrovskis said.

China faces steep tariffs from the US as the country moves forward with imposing a combined 145% tariff on Chinese goods. This total includes a previously announced 125% tariff, now supplemented by an additional 20% import tax. In response, Beijing announced that it has raised tariffs on US imports to 125%.