The EU and US are reportedly bridging the gap, drawing close to a high-level “framework” tariff agreement designed to prevent President Donald Trump’s threatened 50% tariffs on all EU exports. With Wednesday’s deadline fast approaching, diplomats indicate the EU is willing to accept 10% blanket tariffs, but only in exchange for an extension of talks and potential concessions on the 25% car tariff, a significant concern for the German auto industry.
Hints of a potential breakthrough emerged after a meeting in Washington on Thursday morning between EU Trade Chief Maroš Šefčovič and US Treasury Secretary Scott Bessent. Bessent, speaking at a wider briefing, expressed optimism about reaching a deal with the EU, declaring the US anticipated “a lot more trade deals.” Further discussions are scheduled for Thursday afternoon between Šefčovič and his American counterparts, underscoring the urgency.
President Donald Trump’s ultimatum to impose 50% tariffs on all EU goods by July 9th has cast a long shadow over the discussions. This move would drastically increase current tariffs, which already stand at 10% for most goods, 25% for cars, and 50% for steel and aluminum. The current focus is on a streamlined, “agreement in principle,” a strategy advocated by German Chancellor Friedrich Merz, who prioritizes quick relief from existing tariffs over a protracted, detailed negotiation.
A crucial element for the EU in any potential deal is a “standstill clause,” guaranteeing no new tariffs during an extended negotiation period. Diplomats express optimism for a deal soon, possibly even by Friday, allowing Trump to declare a victory. However, past negotiations have highlighted complexities, including a “massive tome” of US grievances. Furthermore, the latest US proposal reportedly lacks details on American concessions, and the EU remains firm on “red lines” regarding strategically important sectors, energy purchases, and non-trade barriers.
Bridging the Gap: EU and US Close to High-Level Tariff Agreement
