Following US President Donald Trump’s temporary halt on significant tariffs against the European Union (EU), Brussels sees a renewed opportunity to finalise a trade deal.
Trump had initially justified the tariffs by claiming talks were “going nowhere,” but a recent phone call with EU chief Ursula von der Leyen reinstated a July 9 negotiating deadline.
The US has already imposed various tariffs on EU goods, including 25% duties on steel, aluminium, and cars, along with a 20% levy on most European products (though this broader tariff is suspended pending negotiations).
The European Commission is spearheading talks for the 27-country bloc, but progress has been limited due to differing negotiation styles.
Experts suggest Trump’s approach, seeking quick, high-impact deals, clashes with the EU’s more methodical, bureaucratic style.
Trump’s demands include eliminating the EU’s trade surplus with the US, primarily through increased European purchases of American energy, and concessions on non-tariff barriers and the value-added tax (VAT), some of which the EU considers non-negotiable.
Washington’s specific requests remain somewhat vague, often appearing as generic demands rather than being tailored to the EU.
Conversely, the EU aims to avoid damaging tariffs that could harm its sluggish economy and the estimated $9.5 trillion transatlantic trade relationship.
Brussels has proposed a detailed plan, including a reciprocal tariff exemption on industrial products. While Trump has dismissed this “zero-for-zero” offer as insufficient to close the trade deficit, the EU has also suggested collaboration on shared concerns, without directly mentioning China.
The EU has threatened retaliatory tariffs on $136 billion worth of US goods and warned of targeting US tech services if talks fail.
With the negotiating deadline approaching, both sides aim for swift progress. There’s anticipation that Trump and von der Leyen might meet in person at the upcoming G7 leaders’ summit in Canada to address the trade impasse.
