President Trump has threatened the European Union with 35% tariffs if it fails to fulfill its promise of $600 billion in investment in the United States. In an interview with CNBC's 'Squawk Box,' President Trump backed the U.S. position that the deal he reached in a handshake with Commission President Ursula von der Leyen in Scotland on July 27 included a promise for the EU to invest $600 billion in the United States by the end of his second term.
"This new investment is in addition to the over $100 billion that EU companies already invest in the United States each year," the fact sheet behind the deal said.
The European Commission is unable to design and implement investments on behalf of the private sector. The $600 billion is described by the Commission as an indicator based on the executive's contacts with industry.
"It's not something that the EU, as a public authority, can guarantee, it's something based on the intent of private companies ," a senior official said last week.
Asked on Squawk Box what was in the investment promise element of the deal, Trump said that if it didn't happen, "then they paid 35% tariffs."
Trump said the investment promise was one of the reasons he had lowered tariffs to an overall rate of 15%, so if it is not met, then the higher tariffs will be reinstated.
The Commission on Tuesday suspended a package of trade countermeasures targeting 93 billion euros worth of US goods, which was scheduled to take effect on August 7, while it continues to negotiate a joint statement formalizing the agreement reached by Von der Leyen and Trump in Scotland. (A2 Televizion)
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