Competitiveness Check – May 15 Edition

The Quick Take

The US-UK trade deal (or Economic Prosperity Deal, EPD), announced on May 8, sets the tone for how future bilateral trade negotiations may progress. Read Penny Naas’ analysis here. Meanwhile, the EU has launched a public review of proposed potential tariffs on €95 billion of US imports. 

Top 5 Transatlantic Trade-Related Developments 

• May 1: The US secretary of commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects on national security of imports of commercial aircraft and jet engines, and parts for commercial aircraft and jet engines. These investigations are often precursors to tariffs.
• May 8: US President Donald Trump announced the outlines of a trade agreement with the United Kingdom, the first since imposing tariffs. The deal is not a comprehensive agreement but rather a framework. It focuses on reducing tariffs in specific sectors.
• May 8: The European Commission launched a public consultation on a list of US imports that could become subject to EU countermeasures, if ongoing US-EU negotiations stall. The list concerns American imports worth €95 billion, with additional restrictions being discussed on certain EU exports of steel scrap and chemical products to the US worth €4.4 billion. The list covers a wide range of industrial and agricultural products, from bourbon and tequila to aircraft and vehicle components.
• May 12: Trump signed an executive order (EO) aimed at lowering the cost of prescription drugs. The order directs the US trade representative and the Department of Commerce to take any appropriate action against “unreasonable and discriminatory policies in foreign countries” that suppress drug prices. It follows another EO signed on May 5 aiming to streamline the process for drugmakers to build new pharmaceutical manufacturing facilities in the United States.
• May 13: The US Department of Commerce initiated a rescission of the Biden administration’s AI Diffusion Rule, which would have limited global access to US chips for artificial intelligence through export controls.

Figure of the Fortnight

750,000: The total number of vehicles exported by the EU to the United States in 2024, according to the European Automobile Manufacturers' Association. The United States is the primary export destination for EU-made cars, leaving the industry highly vulnerable to American tariff measures. In the US-UK EPD, Washington agreed to lower British car tariffs to 10% from 25% for the first 100,000 imported vehicles. 

Quote Unquote

"I think I had a good conversation with Trump on the phone and at the funeral of the pope. But, for me, it's important that if I go to the White House, I want to have a package we can discuss. So it has to be concrete, and I want to have a solution that we can both agree [to]."

European Commission President Ursula von der Leyen during a May 9 press conference in Brussels.

"The European Union is in many ways nastier than China, okay? We’ve just started with them. Oh, and they'll come down a lot. You watch. We have all the cards. They’ve treated us very unfairly."

US President Donald Trump during a May 12 news conference in Washington, DC.