[Financial News] Cars are lined up at the port of Zeebrugge, Belgium, on the 18th (local time), waiting to be imported or exported. Reuters Union Donald Trump, the President of the United States, is strengthening his demands in trade negotiations with the European Union (EU). The Financial Times (FT) reported on the 18th (local time), citing three sources, that President Trump is demanding a tariff rate of at least 15~20%. There was a statement by Michael Beeman, former deputy representative of the U.S. Trade Representative (USTR), that Trump would ultimately compromise with a tariff rate of 15~18% in trade negotiations with Korea. On April 2nd, which Trump declared as 'Liberation Day', he applied a basic tariff of 10% on all imports, indicating that he believes a minimum tariff rate of 15% should be applied. According to sources, Trump's increasing demands in ongoing trade negotiations with the EU are akin to 'testing the waters' to raise the tariff rate to the maximum extent the EU can withstand. Sources also reported that Trump is immovable on the EU's proposal to mutually lower car tariffs, maintaining a position of a 25% tariff rate on specific car items. According to sources, Maroš Šefčovič, the EU trade commissioner overseeing trade negotiations with the U.S., conveyed a pessimistic assessment of his recent Washington meeting to EU member state ambassadors on the 18th. A U.S. administration official told FT that even if a trade agreement with the EU is reached, the U.S. is considering imposing reciprocal tariffs exceeding 10%. Trump has stated that if a trade agreement with the EU is not reached, a unilateral 30% reciprocal tariff set by the U.S. will be applied from August 1st. There is increasing market analysis that Trump's plan to ultimately abolish income tax by collecting tariffs means that high tariffs may not just be for negotiation. Trump is focused on tariffs, which everyone must bear regardless of income, instead of income tax, a direct tax with a high burden on the wealthy, which inevitably increases the burden on low-income groups. With Trump drawing such a big picture, there seems to be little room for negotiation on specific item tariffs. Germany, which is desperate to lower car tariffs, is gradually resigning to this reality. Friedrich Merz, the Chancellor of Germany, expressed concern that the U.S. is skeptical about lowering specific item tariffs and that the EU has no suitable answer if the U.S. continues to hold out. A senior EU diplomatic official pessimistically stated that a trade war might be inevitable. This official said that if Trump insists on the permanent reciprocal tariff rate of 15~20% proposed at the start of trade negotiations in April, there is no choice, and while the EU does not want a trade war, it is likely that the EU will retaliate. Trump is also imposing a 50% tariff rate on steel and aluminum. Another EU diplomatic official also said that the focus is shifting towards retaliation. Meanwhile, the EU is a key trading partner of the U.S. According to the USTR and the U.S. Department of Commerce, last year, the U.S. exported about $370 billion worth of goods to the EU, while the EU exported about $606 billion worth of goods to the U.S. As a result, the U.S. had a trade deficit of $236 billion with the EU in goods trade last year. The EU's export volume to the U.S. surpasses China's export volume to the U.S. of $438.9 billion during the same period. However, China remains the number one country for the U.S. trade deficit, with a deficit of about $295.4 billion last year. dympna@fnnews.com Song Kyung-jae Reporter