The US equity open saw buyers return (buying the dip) in size sending the S&P futs from -5% to +1% following comments from European leaders that suggest the negotiations are beginning:
Goldman Sachs Alberto Bacis noted that today was an important day to execute some price discovery post 2nd April news. The EU commission met today with Foreign/Trade Ministers of member states.
For now, EU is waiting for reciprocal tariffs to be implemented on April 9th. Any actions will come after that. Reading through the headlines, what follows stand out
EC
Ready to negotiate.
EC will set up import surveillance task force.
European Commission President Ursula von der Leyen said on Monday that the EU had offered the United States “zero-for-zero” tariffs on flows of industrial goods as it works to avert an all-out transatlantic trade war.
“We stand ready to negotiate with the United States. Indeed, we have offered zero-for-zero tariffs for industrial goods, as we have successfully done with many other trading partners, because Europe is always ready for a good deal,” she said, adding that the offer was made before Trump’s announcement last week of sweeping new tariffs.
EU President Ursula von der Leyen: “Europe is ready to negotiate with the US. We have offered zero-for-zero tariffs for industrial goods. Because we’re always ready for a good deal.”
Stop listening to news media that are ALWAYS WRONG. This was THE PLAN.pic.twitter.com/zrHav84xAH
— Kyle Becker (@kylenabecker) April 7, 2025
Zero-for-zero is a good start…
…ultimately this is what Navarro said:
*NAVARRO: TRADE PARTNERS ZEROING TARIFFS IS FIRST START
EU Commissioner for Economic Affairs and Productivity (Dombrovskis)
A list of products involved in retaliatory tariffs should be announced today and voted by Wednesday. This list started being created after the steel and aluminium levies announced 2 weeks ago.
The list dropped bourbon….. after heavy lobbying from France, Italy and Ireland, which are seeking to shield their alcohol industries from the escalating trade war.
“If there are no solutions, we are ready to respond by imposing counter-tariffs. This week, member states will discuss and probably already decide on the retaliatory tariffs”
He also explained that the last package of tariffs still needs to be assessed, “showing a willingness to take counter-measures on one hand, but leaving time for further negotiations on the other hand,” Dombrovskis said.
EU DIPLOMACY
A diplomat said:
“Our first strategy is that China will impose tariffs on the United States, so we will probably wait and see what the United States will do, what this will cause,”
FRANCE, GERMANY, AUSTRIA
Paris has been pushing for the EU to consider targeting US services, including digital
France and Germany have specifically raised the possibility of deploying a new tool called the anti-coercion instrument (ACI)
French Trade Minister Laurent Saint-Martin said “We must not exclude any option on goods, on services… and open the European toolbox, which is very comprehensive and can also be extremely aggressive,”
German Economy Minister Robert Habeck said Monday “We have to take a close look at the anti-coercion instrument, which are measures that go far beyond tariff policy,”
IRELAND
Dublin is fiercely against any actions that would target Us services.
Ireland relies heavily on US investment, particularly in the pharmaceutical and tech sectors.
Irish Trade Minister Simon Harris told reporters. Targeting services “would be an extraordinary escalation at a time when we must be working for de-escalation” “It is in many ways the nuclear option if you start talking about the use of the anti-coercion instruments and the likes.”
“What’s important here is that Europe reacts in a calm and measured way,”
ITALY & SPAIN
They seem close to Irish position.
Spanish Trade Minister Carlos Cuerpo said the EU should “convey a message that we do not want to escalate any conflict”, while Italy’s Antonio Tajani said Europe had to “avoid uncontrolled reactions that would cause damage” to both sides.
“We absolutely have to work to avoid a trade war, which would be exacerbating for the US and our businesses,” Foreign Minister Antonio Tajani stressed. “We must negotiate; a united EU must do it.
For what it matters, Goldman’s Bacis is optimistic:
I think this looks good for risk in general…no retaliation from Europe, they re-tabled the zero-for-zero proposal, very strong opposition from Ireland to involve tariffs on services and ACI tool.
>>> There is a bid and there is an offer: admittedly you can park a bus in that bid-offer but there is room….just needs a salesman to bridge the 2 sides, send the vcons and move on to more interesting things in life…
Jokes aside: call me optimist but below highlights read good for risk.
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