While the #European Commission prepares to impose retaliatory duties on $112bn worth of U.S. exports, major EU corporations are holding backchannel talks with Washington โ weakening Europeโs negotiating position.
๐ค Whatโs going on
โซ Mercedes, BMW, Volkswagen, LVMH, and Sanofi are communicating directly with Trumpโs team, seeking exemptions for themselves
โซ Lobbyists for Cognac and Irish Whiskey are pushing to remove alcohol products from the EUโs retaliation list
โซ Of the potential โฌ95bn in tariffs, Brussels may be pressured to reduce that to just โฌ25bn due to corporate and governmental lobbying
๐ Why business is pushing back
๐ U.S.-based production offers higher margins โ no one wants to lose access to the American market
๐ Tariffs on U.S. goods could trigger retaliation, raising costs for European automotive and pharmaceutical exports
๐ Many firms have already shifted investments and production to the U.S.: Mercedes moved GLC manufacturing to Alabama; BMW and Volvo have opened new lines
๐ Consequences
โซ The EUโs weakened stance could hurt its leverage in upcoming trade talks with China
โซ The principle of collective pressure โ a cornerstone of EU strength โ is being undermined
Even LVMHโs CEO Bernard Arnault is personally urging Brussels to compromise: โbetter a free trade zone than a trade warโ
