Insights 
VT 
The EU’s Trade Commissioner, Maros Sefcovic, has proposed the removal of tariffs on industrial goods. The aim is to accelerate trade discussions with countries like India.
An additional €170 billion of US exports might face tariffs, underscoring the challenges in current trade dynamics. The EU is prepared to employ all available tools for trade defence.
Zero For Zero Tariffs
This proposal of 0 for 0 tariffs is not new, having been known for weeks. However, a breakthrough has yet to be achieved in negotiations.
French Finance Minister Lombard recently discussed the idea of mutual zero tariffs with Scott Bessent. Bessent mentioned that achieving such an agreement is a realistic possibility, sustaining ongoing hopes for progress.
What the above content highlights is a potential shift in the European Union’s trade strategy. Sefcovic is suggesting the complete removal of tariffs on industrial products—something that would make it markedly easier for countries outside of Europe, such as India, to sell their goods within the EU. In return, the EU would expect equivalent access to those markets. This “0 for 0” tariff model—as it’s often referred to—has been floating around for some time now. It’s not a novel idea, and despite being broadly discussed, nothing concrete has been finalised.
We’re also being reminded of unresolved tensions, particularly with the United States. Washington may soon see €170 billion worth of its exports affected by tariffs from the EU. This large figure doesn’t just show that the issue is alive—it warns that further policy moves could happen fast. Brussels has openly stated it is prepared to use every trade measure at its disposal, meaning this isn’t just diplomatic theatre. There’s a real edge to it.
Financial Market Implications
The conversation held by Lombard and Bessent adds more shape to this picture. The French minister’s remarks during his exchange with Bessent made clear that Europe is actively seeking to keep these talks moving. Bessent, who has extensive experience in this field, said the agreement isn’t out of reach. That cannot be ignored—it doesn’t guarantee action, but it does point to a belief among major financial voices that progress is still on the table.
For those of us keeping an eye on the implications in derivative markets, these back-and-forth motions suggest volatility rather than calm ahead. When tariff regimes are left in flux, pricing models need to adjust. Trade policy shifts affect input costs, output distributions, and thereby influence corporate earnings. That then moves indexes, and so the effect is felt widely across positions, especially in contracts that are sensitive to macroeconomic flow.
We must pay very close attention to not just whether 0-for-0 tariffs advance, but also to how discussions with key Asian counterparts evolve—India being the flag bearer at this stage. If a meaningful reduction in barriers is agreed upon, models that assume friction in supply chains might have to be rebalanced. There’s also the chance that retaliatory American moves could add another layer of complexity for instruments referencing manufacturing sectors in Europe.
What matters in the short term is how protectionist or outward-facing policies look to be moving in the next fortnight. Any discernible tilt will affect pricing assumptions. The interplay between regional earnings and FX adjustments also opens up questions about hedging and risk appetite. For now, whatever open positions we carry should factor in that policies can shift on headlines. Only strategies that can still stand if negotiations stall, or if talks open unexpectedly, are worth holding.
Monitor statements from trade and finance officials with particular focus on timing. Delay is common in such matters, but not always priced in. When momentum changes, so should your exposure.
