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US President Donald Trump and European Union (EU) chief Ursula von der Leyen are meeting Sunday in Scotland for a decisive push to resolve a months-long transatlantic trade standoff.
Trump has estimated the chances of striking a deal at 50/50.
Looming Tariff Deadline and Economic Stakes
The clock is ticking as Trump has vowed to impose punitive tariffs on dozens of countries, including the EU, by August 1st if trade pacts aren’t reached.
The EU faces a potential across-the-board levy of 30 per cent on its exports to the US.
The European Commission, led by von der Leyen, has been working intensely to secure an agreement to protect the crucial trading relationship, which is valued at 1.6 trillion euros ($1.9 trillion) annually in goods and services.
European diplomats are expected to quickly endorse any deal reached between the leaders.
The meeting is taking place at 4:30 PM local time (1530 GMT) at Trump’s luxury golf resort in Turnberry, on Scotland’s southwestern coast.
Upon his arrival Friday, Trump expressed hope of forging “the biggest deal of them all” with the EU. He notably referred to von der Leyen as “Ursula” and praised her as “a highly respected woman,” a stark contrast to his past criticisms of the EU.
Trump cited “maybe 20 different things” as sticking points but reiterated a “good 50-50 chance” of a deal. The European Commission stated on Thursday that it believed a deal was “in reach.”
Proposed Deal Details and EU Retaliation Plans
According to European diplomats, the proposed agreement includes a baseline 15-per-cent US levy on EU exports, similar to the rate secured by Japan. This deal would also feature carve-outs for critical sectors like aircraft, lumber, and spirits (excluding wine) and commit the EU to increasing purchases of US liquefied natural gas as part of investment pledges.
The European side is also seeking a compromise on steel, potentially allowing a certain quota to enter the US before a 50 per cent tax applies to amounts beyond that.
The EU has already been hit by multiple waves of tariffs under Trump’s presidency, including a 25 per cent levy on cars, 50 per cent on steel and aluminium, and a general 10 per cent tariff, which Washington threatens to raise to 30 per cent if no deal is reached.
While the EU has prioritised reaching a deal to prevent further harm to its economy, it has prepared retaliatory measures as a last resort.
Should talks fail, EU states have approved counter-tariffs on $109 billion (93 billion euros) of US goods, including aircraft and cars, set to take effect in stages from August 7.
Brussels is also developing a list of US services to potentially target. Some countries, like France, suggest the EU should be prepared to use a “trade bazooka” to restrict market access and public contracts, though this would signal a major escalation.
Trump’s Trade Agenda and Domestic Standing
Since returning to power, Trump has actively pursued a campaign to reshape global trade relations. However, domestic polls indicate public scepticism about his strategy, with a recent Gallup survey showing his approval rating at 37 per cent, down 10 points since January.
Despite promising “90 deals in 90 days,” his administration has so far unveiled only five agreements, including those with Britain, Japan, and the Philippines.
A significant agreement with the EU could not only bolster Trump’s dealmaker credentials but also provide a welcome distraction from the ongoing scandal surrounding Jeffrey Epstein, the wealthy financier accused of sex trafficking who died in prison in 2019 before trial.
Trump is currently facing backlash from his supporters demanding access to Epstein’s case files.
