EU Sees Progress Toward US Trade Deal With 15% Tariffs
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The European Union and the U.S. are progressing toward an agreement that would set a 15% tariff for most products, according to diplomats briefed on the negotiations.
Member states could be ready to accept a 15% tariff and EU officials are pushing to have that cover sectors including cars, the diplomats said. Steel and aluminum imports above a certain quota would face the 50% duty, one of the diplomats added.
The diplomats said that while the EU is optimistic that a deal can be reached, they are also cautious that any final agreement will need sign off from President Donald Trump and his ultimate decision is difficult to predict.
Negotiations remain fluid and close is relative, meaning that a deal may not be announced imminently, according to an administration official.
The EU continues to prepare countermeasures if no deal is reached.Ìý(Mlenny/Getty Images)
Both sides have accelerated talks over the past weeks to avoid a full-blown trade war sparked by Trump’s barrage of tariffs against partners across the world. EU and U.S. negotiators were nearing an agreement two weeks ago, but that stalled after the U.S. president threatened Brussels with imposing a 30% tariff on most goods if both sides fail to reach an agreement by Aug. 1.
Should there be no deal by that deadline and were Trump then to carry through with his 30% duty threat, the EU continues to prepare countermeasures for a no-deal scenario.
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They would include a package of tariffs on some 100 billion euros ($118 billion) worth of American goods, with rates matching Trump’s 30% threat. The bloc is also discussing activating its anti-coercion instrument.
The European Commission, the EU’s executive arm, would expect to get the qualified majority of member states that it would require to trigger the ACI, the people said.
The ACI is the EU’s most potent trade tool and a growing number of member states are pushing for its use if a deal isn’t reached. The instrument is primarily designed as a deterrent with its activation requiring a qualified majority of member states to support the move. The ACI would enable the EU to launch a broad range of retaliatory actions, including new taxes on U.S. tech giants, targeted curbs on U.S. investments, and limiting access to the EU market.
The 15% tariff baseline under discussion would include the most favored nation rate, currently averaging 4.8% for EU-U.S. trade, which would then represent an additional 10% compared with the current situation. The same rate is expected to be applied also to sectors like pharmaceutical products or chips, one of the people said.
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The EU’s 15% rate could have limited exemptions linked to aviation, some medical devices and generic medicines, several spirits, and a specific set of manufacturing equipment that the U.S. needs, Bloomberg previously reported.
Brussels is also pushing to shield the bloc from future sectoral tariffs on pharmaceuticals and semi-conductors and the two sides have been discussing a ceiling on those levies.
Trump announced a tariff deal with Japan on July 22 that featured across-the-board 15% duties on imports — lower than the 25% level threatened. That also means that the tariff on Japanese autos is lower than the current 25% rate on major car exporters including the EU.
