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JÖRN FLECK: Please. A warm welcome on my behalf as well to the Transatlantic Forum on GeoEconomics. And I am extremely excited to be joined by Maroš Šefčovič, the European commissioner for trade and economic security. Thank you for being with us this morning and helping us kick off the trade discussions at the Transatlantic Forum.
I think the Brussels audience here in the room is very familiar with you, but to our transatlantic and global audience I think it’s worth highlighting that you’re now in your fifth term, one of the longest-serving commissioners, someone who has handled some of the most dynamic, most challenging portfolios, from energy and energy security to Brexit and now trade, and someone who has earned, I think well-deserved the nickname Mr. Fixit in the Commission. And so I can’t think of anyone better to help us kick off the trade conversations at the Transatlantic Forum.
And I think a natural place to start is, obviously, the US-EU framework agreement, the so-called Turnberry deal. You were—you played a pivotal role in securing that deal and you’re well aware of the criticisms that has received. And yet, you’ve said it’s the only responsible way forward. So maybe we kick off by you telling us why you still believe that and also, then, where you believe that deal will hopefully lead us in the transatlantic economic relationship in terms of the politics and the big picture of the relationship.
MAROŠ ŠEFČOVIČ: Thank you very much, Jörn. And I also would like to thank our hosts. As economist and transatlanticist, I am always very happy to be—to be here and discuss with friends and partners where we can do more to make sure that our EU-US transatlantic ties are as strong as ever.
And that was clearly the attitude we have adopted when we started the challenging and demanding negotiations with the new US administration on the EU-US trade deal. I have to say that I spent hundreds of hours talking to my counterparts in US, and I would say thanks to that very strong interactive—and I have to add very intense, but at the same time cordial—discussions we have, I think that now we are in the stage that we understand each other much better.
America has the same goal as European Union: to reindustrialize; to be much more secure against all kinds of weaponization of the goods, semiconductors, rare earths, magnets, you name it. So, simply, we feel that we are in this new age of geoeconomics where two of us, as the biggest trading partners and closest of allies, that we should simply work together.
Just for the—for the audience to imagine the magnitudes of that relationship, every year we trade more than 1.7 trillion of euros. So if you can imagine almost five billion euros flying across the Atlantic, that’s what is happening every single day. We are the biggest mutual investors. So it’s almost five trillion euros of assets which we mutually invested in our economy. And at least six million people on the—on the both sides of Atlantic has a direct dependence in their jobs on these trade flows, making it forward. So this was very clearly what was very much on my mind, because I think first and foremost we have to think about jobs, about the prosperity of our companies, about our alliance and relationship as close partners, and these being, I would say, the frameworks with which we started to work.
It was very clear that for the new US administration the agenda is different than the—from the—from the previous one. They believe that lots of economic challenges in US has been caused by unfair trade policies. And their decision not only against Europe, but against everyone was to fix this issue through the—through the tariffs.
So we found a way—and coming to your—to your question—I believe that, indeed, we got the best possible deal, and I’m ready to compare the EU-US deal with any other deal which is on the table or was already approved. And I very much appreciated that we found the understanding with our partners that 15 percent should be all-inclusive. There is no stacking on top of it. And once we agreed this deal, I’m happy to say that we are following it to the dot.
So there have been two executive orders signed by President Trump. We put on the table legislative proposals for lowering the tariffs on American goods. And it means that parts of the deal which is so important for our car industry is retroactively applied as of 1st of August, which means that 600 million euros for August, 600 million euros for September will be returned back to the—to the car manufacturers. And of course, I can go into the details of the carveouts which are so key for our aerospace industry, or generics for our pharmaceutical business, and many other areas, and also this forward-looking element which I think will become very important right now because, according to our agreement, we should be shielded from the incoming very high tariffs on pharmaceuticals by this 15 percent all-inclusive tariff.
So if I—if I look at it from the perspective of economics, from the perspective of the new geopolitics, and from the perspective of what kind of mood it brings to transatlantic dialogue and exchange of the views, there have been all the positives on this side.
So I’m very glad to say that we are in permanent regular contact with my counterparts. Yesterday late night I had another call with the secretary of commerce. We had very good discussion about the next step with Jamieson Greer, US trade representative, in Kuala Lumpur. And as you know, our president of the Commission, Ursula von der Leyen, is in regular contact with the president of the United States to discuss, of course, day-to-day, I would say, geopolitical challenges. And this was something which was not thinkable in February, in March, but now we are there. And I see it, indeed, as an opening to the wider agreement and to, eventually, the trade agreement between EU and US, which we are missing and which would add, I would say, additional energy, additional flow into the trade, and I’m sure create more jobs and bring even more investments.
JÖRN FLECK: Thank you, Commissioner.
To the audience here and online, you can submit questions at AskAC.org—AskAC.org. So I’ll try and get to one or two towards the end.
But a quick follow up on—you know, on the deal and the criticisms. There’s been questions—it was supposed to bring stability. At the same time, there’s been questions about the durability with the Trump administration and the president personally still pushing on, for example, digital regulations. We had the uncertainty around pharma, movies, questions about whether it is really a best deal in terms of the administration expanding the list of sectoral tariff products and questions around WTO compatibility. Whichever one of those you want to respond to, one or two, how would you respond to that?
And you mentioned the forward-looking nature of this agreement. How do we really get to a deal and not have an endless set of negotiations?
MAROŠ ŠEFČOVIČ: Yeah. I think I would answer with a question: What was the alternative? Would we be better off with a full-scale trade war with the United States of America or with tariffs somewhere between 30 to 50 percent? Our projection has been quite clear, and this is what we shared with our American colleagues on all levels: If the tariffs are over 30 percent, our trade is more or less halted with all the repercussions for this, six million jobs on both sides of Atlantic—in US, in the EU. We, over the decades, built an absolute unique system of supply chains which are integrated, and a lot of them is based on SMEs which simply cannot move to US or vice versa because they’re small companies living in a special ecosystem. And therefore, I am absolutely convinced that this was only responsible choice to make.
We are getting first data for the—for the trade from August, from September. We can compare our deals to other deals which have been there. And every comparison, you know, looking at the—at the trade flows, if we are looking at the actual tariffs being paid, EU is compared very favorably with any—with any other deal, and we are very happy about that.
Of course, you rightly pointed out—and this is what is a permanent discussion with my US counterparts—this is very massive trade relationship, and therefore it would be permanent relationship management. So there are a lot of things, a lot of questions of our American partners, and of course we have a lot of questions on our own. But I think the best thing is to discuss it as allies, to sit at the table, to look for the solutions, and resolve them. And I think that we are now in the atmosphere and the personal relations that we can have normal debate/discussions.
I’m sure that not on everything we will agree. For sure we will have disputes, as big trading powers must have if we are talking about 1.7 trillion of euros of trade every year. But what is important is how we approach it. And if we approach it from the perspective, OK, there is an issue; let’s explain, which I think was a big part of what I was doing in US, is to simply explain some of our laws, explain that none of them is directed against US enterprises, against [US] entities; and if there are some issues which persist, let’s look at them how we can—how we can resolve them. And this process, of course, is continuing. But what I hope we will achieve would be that this would not be every time huge political issue; that it would be the matter-of-fact there is a dispute, there is an issue, there is a discussion, and there is a—there is a resolution or there is an adjustment on how we—how we conduct certain policies.
So that’s the something what I would like to achieve, to set up the process. And we are discussing with my—with my American partners how we can—how we can achieve that.
JÖRN FLECK: As a follow-on to that, with your experience of now these negotiations, dealing with the Trump 2 administration, your engagement, you had similar experience in Trump 1 administration dealing with some very challenging energy issues. What—how did the last few months inform your perspective on what is possible on a positive, proactive US-EU cooperative agenda? You mentioned your conversations with US Trade Representative Jamieson Greer on steel and aluminum that you’ve restarted, where the United States and the European Union are trying to address very similar—the same overcapacity/national security/reindustrialization issues. So what space do you see for a collaborative, proactive US-EU trade agenda moving forward, both in the small and the big things and issues?
MAROŠ ŠEFČOVIČ: Let met just give you two examples. One would be the steel and second would be semiconductors. And I think both are very much linked with economic security and the challenge which we face both—and this is global—overcapacity of production of certain products like, for example, the steel.
So in—the steel issue was actually also the one I discussed yesterday late night with secretary of commerce because I think we concluded very early on in our negotiations in early spring that if it comes to the steel export we are not each other problems. We are exporting to US something like four million tons with one million of additional ton of steel derivatives. The exports from US to Europe are even smaller. We are focusing on highly specialized steel which is needed for our, you know, military industry, for aerospace, and so on and so forth. So we are just really natural, natural partners there.
But we have the same problem, and the problem is that our markets for a long time been simply too open, and the—and the global overcapacity of the steel production just grew by unprecedented pace. EU lost seventy million of ton of steel production over the last ten years, and half of it in the course of the last three years. So it’s very clear that we have to—we have to protect our industry. And therefore, very soon they are going to propose the post-2026 safeguard measures, meaning that we would work with the [tariff-rate quotas (TRQs)], meaning with the quotas, for all those who would like to export steel to European Union.
And we are discussing with our American partners kind of ringfencing model where we would, between us, trade on the TRQ with very low or zero tariffs, because our steel business is actually quite complementary, but we would have very similar measures if it comes to deal with the global overcapacity, because it’s a big issue for everyone. And this is, I think, something which is very promising. I also explain to my American partners how the steel derivatives business is affected by these additional 232 tariffs, because we are talking about fridges, dishwashers, motorbikes. And I know that very often we, in the EU, our approach, that we have very complicated rules and regulations. But try to count how much steel there is in a fridge or in a motorbike, and you can compare them both. So I think the best thing would be really to find the solution in this regard.
Second example, on semiconductors. US has the best chip designers. We have the best machine in the world which is printing the chips. And I think we are really absolute natural partners. And therefore, when we looked at the deal and this so-called strategic purchase chapter, we added our interest in buying forty-billion-dollars worth of AI chips, because we want to build these AI chip centers also here in Europe. And it’s only natural that there should be kind of strategic cooperation between US and the EU. So these are just the two examples, but I believe that on overall I would say bilateral trade agenda, we can do much more. Because in many aspects these two economies have been built as a complementary to each other. And I think that it’s a time to kind of restore it and open new potential, which we have been missing in the past.
JÖRN FLECK: Zooming out a little bit and taking a look at the broader geoeconomic and geopolitical picture, it seems that the global economic order, multilateral rules-based system is under serious pressure. Not just from a Trump administration shifting US trade and international economic policy, but from China and its overcapacity and nonmarket practices, from rising protectionism. How are you, and how’s the European Commission, thinking about whether we are at the precipice of a fundamental shift in the global order, and how the European Union, very much as a child of that existing order, of multilateral rules-based order, should respond, learn some new tricks maybe?
MAROŠ ŠEFČOVIČ: I think that first and foremost is it’s important to acknowledge the fact that the global trade will not go back to the pre-April the second situation. Especially because in United States, I would say, this new approach has bipartisan support. So all those who are longing for the world of the past, they’re losing time. So I think what is very important is to adjust as what we are doing is that we are looking for the best possible arrangement, relationship, and the deal with the US. And I believe that there we are—we are—we are doing as well as we could in the short period of time in this dramatic paradigm shift of how to approach the trading relationship.
Second very important element for us is that US is our biggest trading partner, but it represents 20 percent of our trade relationships. So we are working very hard on the remaining 80 percent. So it means we are diversifying our trade relations. Just this year we put on the table for the final ratification an agreement with Mercosur, which would be our biggest [free trade agreement]. Just to compare, it’s four times bigger than our free trade agreement with Japan. We put on the table the free trade agreement with Mexico. I just came from Southeast Asian countries where we signed the new agreement with Indonesia. And I believe that Malaysia, Philippines, and Thailand will be able to conclude the next year. We had very good discussion with Australian trade minister. And we are also intensively negotiating with the UAE and GCC countries.
So I believe that with all these partners we can progress significantly this year, the next year. We are having regular meetings with India, which, again, is one of the—I would say, the biggest markets and one of the biggest economies in the world. So that’s where we want to kind of diversify our trade relationship. And I would say that we put it on top of what we already have. As you probably know, we, we are biggest trader on this planet. We have already now forty-four free trade agreements with more than seventy countries. And we are looking at them also from the perspective which one needed to be upgraded. Upgraded from the perspective of digital trade, digital services, because many of these agreements have been signed before this became significant part of the economy. So that’s very important second track.
And third track is linked with multilateralism, with our commitment to the rules-based trade, and the needed deep reform of the WTO. And here, I think we have the same view as Dr. Ngozi, director-general of the WTO, that we simply need to reform WTO to reflect much better the accumulated problems over the last decade. How to deal with the overcapacities? How to deal with the illegal subsidies? How to better capture the advantage the nonmarket economies are taking from the WTO? And a lot of other challenges which simply we need to face as a global community, otherwise this rule-based the global order would be under more and more pressure. So these would be the three tracks—find the best possible solution and permanent relationship management with US, spread the wing even more with our global partners, and reform multilateral global institutions which are looking after trade agenda.
JÖRN FLECK: Well, I’m going to try and squeeze in two questions. You can choose which one to answer from the audience. First one from Emily Kerstens. If [the International Emergency Economic Powers Act (IEEPA)], the current legal basis for President Trump’s tariffs, is struck down by the Supreme Court, how would that impact the US-EU framework agreement? And secondly—from your perspective—and secondly, can the current talks and the negotiations lead to a real trade agreement, similar to what was attempted with [the Transatlantic Trade and Investment Partnership (TTIP)], between the US and the EU?
MAROŠ ŠEFČOVIČ: I think that I can—I can answer them both. I mean, I will start with the second. What I think we are going through right now is really, I would say, the beginning of the—of the new chapter. Simply, the perception in US is that the trade system, as it was built until the 2nd of April, is something which was not fair to the US. They want fundamentally to change the trade relationship with their partners. And we are going now through, I would say, this very elaborate, and sometimes very, very painful, process. But I think that we understand now each other much better than before. And through this, I would say, gradual step—and that was the part of the discussions we had also in in Kuala Lumpur—is that we should kind of aim for the trade agreement with US.
How ambitious, how detailed, and what sectors you would cover, it’s for late. Because what we need right now is to stabilize the relationship, to make sure that trade flows are flowing, that the impact on real economy, on jobs and company, is as minimalistic as possible, to deal with the problems which are still on the table. And we are focusing on that. And see where this would lead us in the form of the future trade agreement. This is how we see it also from the perspective of the compatibility with the WTO. And of course, if the Supreme Court would decide otherwise, I’m sure that it would be up to the US partners to see how they would adjust their policies. And I think what is very important right now, that we can pick up the phone, we can talk about anything, and we can find solutions to any challenge which is arising from US trade. Thank you.
JÖRN FLECK: Ever the pragmatist. So thank you so much, Commissioner.
That’s all we have time for this morning, but really appreciate you giving us these insights, kicking off our trade conversations which will now continue with my colleague Josh Lipsky, senior director of the Geoeconomics Center, and a session on triangulating trade. Where I’m sure his panel will dive into all of the issues you’ve raised in more—even more detail. And thank you again, in a huge round of applause. Thank you for the Commissioner. Thank you.
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Further reading
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Both Europe and the United States would benefit from working together to secure affordable and accessible pharmaceutical supply chains.
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The trade and tariff deal recently struck in Scotland has several important elements that are yet to be determined.
Image: The European Commission's Maroš Šefčovič speaks at the Atlantic Council's 2025 Transatlantic Forum on GeoEconomics on September 30, 2025.
