EU and US Hustle for Trade Deal to Skirt Trump’s Massive Tariffs

The European Union and the United States are in a frantic hustle to finalize a trade “framework” deal, a critical effort to circumvent President Donald Trump’s looming 50% tariffs on all EU exports. With Wednesday’s self-imposed deadline fast approaching, discussions in Washington are described as going “down to the wire.” Reports suggest the EU is prepared to concede to a 10% blanket tariff in exchange for an extension of talks and potential concessions on the significant 25% car tariff that impacts the German automotive sector.
Optimism, albeit cautious, was expressed by US Treasury Secretary Scott Bessent after his Thursday meeting with EU Trade Chief Maroš Šefčovič. Bessent highlighted the US’s broader objective of pursuing “a lot more trade deals.” The intensity of negotiations is expected to continue through Thursday afternoon with US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, and into the weekend with European officials, as indicated by Bessent.
The urgency stems from President Donald Trump’s threat to levy a punitive 50% tariff on all EU goods starting July 9th if a deal is not secured. Currently, EU goods face various tariffs, including 10% on most items, 25% on cars and parts, and 50% on steel and aluminum. The preference on the European side, particularly from German Chancellor Friedrich Merz, is for a rapid, “agreement in principle” similar to the UK’s, rather than a drawn-out, complex negotiation, aiming to provide immediate relief for businesses.
A crucial point for the EU is the inclusion of a “standstill clause” in any extended negotiation, preventing the imposition of new tariffs. While there’s hope for a deal by Friday, potentially aligning with Independence Day for a presidential announcement, the complexities of the negotiations are acknowledged. Prior talks revealed a substantial list of US “grievances,” and the latest US proposal reportedly lacks details on their own concessions, particularly impacting the EU’s “red lines” on strategic sectors, economic purchases, and regulatory non-trade barriers.