When they meet informally ahead of the EU-Balkans summit in Sofia on 17 May, the EU heads of state and government will have to show a united front on the issue of the US withdrawal from the Iran nuclear deal and the extraterritorial impact of the US sanctions against Tehran, and on the burning issue of transatlantic trade relations.
"Policies of Donald Trump on Iran deal and trade will meet a united European approach", European Council President Donald Tusk tweeted on Tuesday 8 May.
The European leaders will address these issues at an informal dinner on Wednesday evening, 16 May.
Trump's decision to withdraw from the deal signed in 2015 between Germany, France, the UK, USA, China, Russia and Iran – the Joint Comprehensive Plan of Action (JCPOA) to put an end to Iran's nuclear ambitions in return for a progressive lifting of sanctions affecting the Iranian economy – will have an important impact on the US and European businesses that have undertaken trade with Iran, particularly the US and European aircraft manufacturers, Boeing and Airbus respectively, as well as automobile manufacturers like Germany's Volkswagen and the Franco-Japanese manufacturer Renault-Nissan.
The US administration expects European businesses to come into line with the re-imposition of sanctions. US national security adviser John Bolton stated that the US sanctions had immediate effect for new contracts and an exit time limit of a few months for businesses already involved in the country.
The US ambassador in Germany thus asked the country's companies on Tuesday to cease their activities in Iran immediately.
The press department of France's President Emmanuel Macron warned that Europeans would "do their utmost to protect the interests" of their companies in Iran "by intervening with the US administration" at EU level.
French Economy Minister Bruno Le Maire said it was "unacceptable" that the USA should be positioned as "the planet's economic policeman" and he spoke out about a "mistake" on the economic level and that of international security, underlining that France has tripled its trade surplus with Iran since 2015. This decision "will pose difficulties for all European businesses that have considerable economic difficulties. But bigger still than the economic problem, is the problem of principle, of having extraterritorial sanctions", he said.
"Trump's decision not to renew the exemptions to the main US sanctions against Iran risks creating political and economic instability in the region and beyond", the European business association BusinessEurope stated, adding that it was not easy at this stage to quantify the impact on the European business sector, but calling on the EU and its member countries to help businesses address the current uncertainty.
Trade quarrel. The EU is already put to the test on the economic level in the transatlantic trade quarrel put up by Trump through the unilateral raising of US customs duties on imports of steel and aluminium. The EU demands a permanent exemption from these duties before engaging in discussions on other issues.
Discussions between the European Commission and US administration continue as part of the dialogue process opened by European Trade Commissioner Cecilia Malmström and US Commerce Secretary Wilbur Ross on 21 March, a source close to the issue told EUROPE on Wednesday 9 May. This process has not yet resulted in anything concrete, however.
The big EU member states are struggling to speak with one voice on the message to be given to Washington. While France clearly echoes the Commission, Germany and Italy do not hide their desire for a wider agreement including a tariff reduction on certain products and putting aside the thorniest issues in the TTIP negotiations (which have been at a standstill since the departure of Trump's predecessor Barack Obama from the White House – see EUROPE 12015).
Several European leaders said during the European Council on 23 March that they do not want talks with the USA for a 'TTIP lite' trade agreement that would just include the treatment of tariff barriers (see EUROPE 11989).
By contrast, the EU28 have shown a certain unity thus far as concerns the package of counter measures put together by the Commission regarding the possible re-imposition of the US taxes. These counter measures are compatible with the rules of the WTO and provide in particular for customs duties on US exports up to €2.8 billion (see EUROPE 11983). (Original version in French by Emmanuel Hagry)