April 28, 2025 • 9 mins
EU Commissioner Valdis Dombrovskis discusses the EU's trade strategy and negotiations with the US. He speaks with Bloomberg's Romaine Bostick and Vonnie Quinn.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news, keeping an eye on
everything that's been going on in the currency space. Here
on this Monday, as we welcome our audiences across all
of our Bloomberg television and radio platforms, a special conversation
starts right now with Valdez Dombroskis. He's the Commissioner for
Economy and Productivity for the European Commission, effectively the man
(00:25):
in charge and overseeing that trade block's economic policy. Great
to have you here, a Valdis you are here in
the United States at the New York Stock Exchange. Last
week you were down in Washington for the IMFN World
Bank meetings. I know there was a big message delivered
by our US counterparts with regards to trade and with
regards to the geopolitical conditions. I am curious about what
(00:46):
message you brought to the table for your US counterparts.
What did you tell them?
Speaker 2 (00:52):
Good afternoon. Well, the main message is that we continue
to engage with United States. We see United States as
our strategic ally and we have largest trade and investment
relationship in the world. So we are willing to invest
in this relationship, continue our cooperation, including finding negotiated solution.
(01:16):
As regards trade and tariffs.
Speaker 1 (01:19):
Are there active negotiations at the high level between the
EU and the United States.
Speaker 2 (01:26):
Well, indeed, negotiations are ongoing. Also last week I was
meeting Scott Vesant in Washington and we were also patching
up on these issues. But I would say there's also
still lots of ground to cover.
Speaker 3 (01:40):
So what happens when you see somebody like Georgia Maloney
of Italy acting like she's been given a mandate to
make some kind of a deal with the United States.
Can you stop that from happening or do you lean
into it and say, well, if Italy can leave the negotiations,
maybe we'll get somewhere.
Speaker 2 (01:58):
Well, first of all, it's clear that also individual EU
member states like Italy and others are having the bar
lateral relationships with US and continues their engagement at the
same time. As regards specifically trade, trade, external trade is
exclusive competence of European Unions, so negotiated by European Commission
(02:23):
on behalf of EU member states, and all EU member
states know it and respecting, so there's no issues there.
Speaker 3 (02:31):
There has been some suggestion that Europe and China are talking,
and I think the idea is that perhaps you might
agree to something in order to pressure the United States.
Is that or has that been happening?
Speaker 2 (02:43):
Well as regards these US and China, well, first of all,
we note that basically right now the US market is
close to Chinese goods, so tariffs are approhibitively high. And
as the question is what is going to happen with
(03:04):
all those goods which are not now reaching US market,
where they are going? Are they going, for example, to
the EU market? So our message to our Chinese counterparts
is that it's important also that China shows restraints that
it does not put all this now our capacity of
goods to other markets, including EU, because then we will
(03:24):
have to react to how to close our market to
protect protect our economy, our companies, and that will lead
even to further global economic fragmentation. And it's in everyone's
interest actually to preserve multilateral rules based trading system.
Speaker 1 (03:41):
But we have a White House here in the United
States all this that is not pursuing a multilateral rules
based system. I mean, that is very clear. So how
do you negotiate a deal with the United States and
potentially at the same time negotiate a deal if necessary
with China.
Speaker 2 (04:01):
Well, that's exactly the point where we think that at
the end of the day, sticking to the rules following
multilateralism is going to be better for everyone. Right now, obviously,
it's the fact that Trump administration has put those tariffs,
including on European Union, so we are willing to negotiate.
(04:21):
By the way, we have suspended our first set of
contact tariffs, which already decided, because we also suspended them
for ninety days to give those negotiations a chance, and
we do hope to find a negotiated solution for our.
Speaker 1 (04:37):
TV and radio audiences. We're in conversation right now with
Baldis dombrotskis the EU Economic Affairs Commissioner, live from the
NYSC and mister Commissioner, I am curious as to what,
if any demands the US has made with regards to
what your tariffs or effectively or barriers, if you will,
would have to be in order to get the United
(04:58):
States to remove potential tariffs and bury US from that side.
Is this a conversation about zero for zero in terms
of tariffs or is there more that they're asking for.
Speaker 2 (05:10):
Well as regards tariffs themselves. It's worth noting that actually,
well before the recent introduction continued, Yes, I'm hearing you.
So before the recent introduction of those tariffs, the tariffs
(05:30):
which EU was putting on US was a trade weighted
average of one point two percent. US tariffs on the
EU trade weighted average was one point four percent. So actually,
we have very low tariffs on each other, and indeed
one of the offers for EU side was to go
zero for zero on industrial tariffs. We are also exploring
(05:50):
possibility to buy more LNG from the United States, to
cooperate more in area of energy, and are willing to
explore other areas.
Speaker 1 (06:01):
Does one of those other areas include the bad tax?
Speaker 2 (06:05):
Well, no, Actually, that's the point that we don't think
it belongs to trade negotiations because our value added tax
is consumption tax. It's applied equally on both domestically produced
and imported goods, and as such is not trade distortile.
It's like similarly, US states have sales taxes, which are
(06:27):
also consumption taxes, which are not trade distortile, and they
just do not belong to trade versations.
Speaker 3 (06:34):
Commissioner, the administration has said the first to the table
will get the best deal. Are you concerned that we'll
see deals from other large blocks of countries or countries,
and that you might be a little bit late, that
you'll get maybe worse of the deal at that point.
Speaker 2 (06:49):
Well, we don't think we are in a race here.
What's import that to reach agreement on a substance and
to find mutual acceptable solution.
Speaker 3 (07:00):
Are sticking points right now.
Speaker 2 (07:03):
Well, since those are ongoing negansations, I cannot go into
much detail. I indicated some of the ideas which we
are exploring, but as I was also saying, there are
still quite a bit ground to be covered.
Speaker 1 (07:17):
I am curious a commissioner about the relative strength that
we've seen over the last few weeks in the euro
relative to the dollar, and it's got a lot of
investors questioning whether that's something sustainable. What types of discussions
have you had with your peers over there in Europe
about capitalizing or at least for what right now is
a modest reallocation away from US assets in the European assets.
Speaker 2 (07:40):
Well, first of all, as regards euro exchange rate, European
Central Bank is not targeting the exchange rates, so exchange
rate is determined by the markets. And also the level
we see now is not like historical highs of euro
we had seen actually also euro at higher levels. But
(08:00):
in any case, indeed we see interest from investors in
Euro denominated papers, and there's going to be quite a
strong supply of these Euro denominated papers in this and
next year. So there's going to be opportunities for investors
to invest in Europe. So if investors want predictabilities, they
(08:25):
want stability, respect for the role of law, Europe is
a good place to invest.
Speaker 1 (08:30):
Does that include an increase in bond sales, particularly common
bond sales.
Speaker 2 (08:36):
Well, actually we have a strong pipeline of bond sales
this year and next. We have close to three hundred
billion euros of Recovery and Resilience facility bond. Still, we
recently proposed a new common Borrowing Facility safe facility for
common procurement of defense equipment for member states. It's another
(09:00):
one hundred and fifty billion euros if we talk about
common borrowing. But also Germany has recently announced additional five
hundred billion euros package to strengthen investment in infrastructure and defense,
so also other countries. So as you see there, it's
going to be quite substantial supply also from European side.
Speaker 1 (09:22):
All right, Commissioner, I really appreciate you taking time for us.
Foudystem brodskis the Commissioner for Economy and Productivity for the
European Commission.
Bloomberg Audio Studios, podcasts, radio news, keeping an eye on
everything that's been going on in the currency space. Here
on this Monday, as we welcome our audiences across all
of our Bloomberg television and radio platforms, a special conversation
starts right now with Valdez Dombroskis. He's the Commissioner for
Economy and Productivity for the European Commission, effectively the man
(00:25):
in charge and overseeing that trade block's economic policy. Great
to have you here, a Valdis you are here in
the United States at the New York Stock Exchange. Last
week you were down in Washington for the IMFN World
Bank meetings. I know there was a big message delivered
by our US counterparts with regards to trade and with
regards to the geopolitical conditions. I am curious about what
(00:46):
message you brought to the table for your US counterparts.
What did you tell them?
Speaker 2 (00:52):
Good afternoon. Well, the main message is that we continue
to engage with United States. We see United States as
our strategic ally and we have largest trade and investment
relationship in the world. So we are willing to invest
in this relationship, continue our cooperation, including finding negotiated solution.
(01:16):
As regards trade and tariffs.
Speaker 1 (01:19):
Are there active negotiations at the high level between the
EU and the United States.
Speaker 2 (01:26):
Well, indeed, negotiations are ongoing. Also last week I was
meeting Scott Vesant in Washington and we were also patching
up on these issues. But I would say there's also
still lots of ground to cover.
Speaker 3 (01:40):
So what happens when you see somebody like Georgia Maloney
of Italy acting like she's been given a mandate to
make some kind of a deal with the United States.
Can you stop that from happening or do you lean
into it and say, well, if Italy can leave the negotiations,
maybe we'll get somewhere.
Speaker 2 (01:58):
Well, first of all, it's clear that also individual EU
member states like Italy and others are having the bar
lateral relationships with US and continues their engagement at the
same time. As regards specifically trade, trade, external trade is
exclusive competence of European Unions, so negotiated by European Commission
(02:23):
on behalf of EU member states, and all EU member
states know it and respecting, so there's no issues there.
Speaker 3 (02:31):
There has been some suggestion that Europe and China are talking,
and I think the idea is that perhaps you might
agree to something in order to pressure the United States.
Is that or has that been happening?
Speaker 2 (02:43):
Well as regards these US and China, well, first of all,
we note that basically right now the US market is
close to Chinese goods, so tariffs are approhibitively high. And
as the question is what is going to happen with
(03:04):
all those goods which are not now reaching US market,
where they are going? Are they going, for example, to
the EU market? So our message to our Chinese counterparts
is that it's important also that China shows restraints that
it does not put all this now our capacity of
goods to other markets, including EU, because then we will
(03:24):
have to react to how to close our market to
protect protect our economy, our companies, and that will lead
even to further global economic fragmentation. And it's in everyone's
interest actually to preserve multilateral rules based trading system.
Speaker 1 (03:41):
But we have a White House here in the United
States all this that is not pursuing a multilateral rules
based system. I mean, that is very clear. So how
do you negotiate a deal with the United States and
potentially at the same time negotiate a deal if necessary
with China.
Speaker 2 (04:01):
Well, that's exactly the point where we think that at
the end of the day, sticking to the rules following
multilateralism is going to be better for everyone. Right now, obviously,
it's the fact that Trump administration has put those tariffs,
including on European Union, so we are willing to negotiate.
(04:21):
By the way, we have suspended our first set of
contact tariffs, which already decided, because we also suspended them
for ninety days to give those negotiations a chance, and
we do hope to find a negotiated solution for our.
Speaker 1 (04:37):
TV and radio audiences. We're in conversation right now with
Baldis dombrotskis the EU Economic Affairs Commissioner, live from the
NYSC and mister Commissioner, I am curious as to what,
if any demands the US has made with regards to
what your tariffs or effectively or barriers, if you will,
would have to be in order to get the United
(04:58):
States to remove potential tariffs and bury US from that side.
Is this a conversation about zero for zero in terms
of tariffs or is there more that they're asking for.
Speaker 2 (05:10):
Well as regards tariffs themselves. It's worth noting that actually,
well before the recent introduction continued, Yes, I'm hearing you.
So before the recent introduction of those tariffs, the tariffs
(05:30):
which EU was putting on US was a trade weighted
average of one point two percent. US tariffs on the
EU trade weighted average was one point four percent. So actually,
we have very low tariffs on each other, and indeed
one of the offers for EU side was to go
zero for zero on industrial tariffs. We are also exploring
(05:50):
possibility to buy more LNG from the United States, to
cooperate more in area of energy, and are willing to
explore other areas.
Speaker 1 (06:01):
Does one of those other areas include the bad tax?
Speaker 2 (06:05):
Well, no, Actually, that's the point that we don't think
it belongs to trade negotiations because our value added tax
is consumption tax. It's applied equally on both domestically produced
and imported goods, and as such is not trade distortile.
It's like similarly, US states have sales taxes, which are
(06:27):
also consumption taxes, which are not trade distortile, and they
just do not belong to trade versations.
Speaker 3 (06:34):
Commissioner, the administration has said the first to the table
will get the best deal. Are you concerned that we'll
see deals from other large blocks of countries or countries,
and that you might be a little bit late, that
you'll get maybe worse of the deal at that point.
Speaker 2 (06:49):
Well, we don't think we are in a race here.
What's import that to reach agreement on a substance and
to find mutual acceptable solution.
Speaker 3 (07:00):
Are sticking points right now.
Speaker 2 (07:03):
Well, since those are ongoing negansations, I cannot go into
much detail. I indicated some of the ideas which we
are exploring, but as I was also saying, there are
still quite a bit ground to be covered.
Speaker 1 (07:17):
I am curious a commissioner about the relative strength that
we've seen over the last few weeks in the euro
relative to the dollar, and it's got a lot of
investors questioning whether that's something sustainable. What types of discussions
have you had with your peers over there in Europe
about capitalizing or at least for what right now is
a modest reallocation away from US assets in the European assets.
Speaker 2 (07:40):
Well, first of all, as regards euro exchange rate, European
Central Bank is not targeting the exchange rates, so exchange
rate is determined by the markets. And also the level
we see now is not like historical highs of euro
we had seen actually also euro at higher levels. But
(08:00):
in any case, indeed we see interest from investors in
Euro denominated papers, and there's going to be quite a
strong supply of these Euro denominated papers in this and
next year. So there's going to be opportunities for investors
to invest in Europe. So if investors want predictabilities, they
(08:25):
want stability, respect for the role of law, Europe is
a good place to invest.
Speaker 1 (08:30):
Does that include an increase in bond sales, particularly common
bond sales.
Speaker 2 (08:36):
Well, actually we have a strong pipeline of bond sales
this year and next. We have close to three hundred
billion euros of Recovery and Resilience facility bond. Still, we
recently proposed a new common Borrowing Facility safe facility for
common procurement of defense equipment for member states. It's another
(09:00):
one hundred and fifty billion euros if we talk about
common borrowing. But also Germany has recently announced additional five
hundred billion euros package to strengthen investment in infrastructure and defense,
so also other countries. So as you see there, it's
going to be quite substantial supply also from European side.
Speaker 1 (09:22):
All right, Commissioner, I really appreciate you taking time for us.
Foudystem brodskis the Commissioner for Economy and Productivity for the
European Commission.
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