US and EU close in on 15% tariff deal
tariffs
on European imports, similar to the agreement Donald Trump struck with Japan this week.
Brussels could agree to the so-called reciprocal levies to avoid the US president's threat to raise them to 30 per cent from August 1st, three people familiar said.
'The Japan agreement made clear the terms of the shakedown,' said one EU diplomat. 'Most member states are holding their noses and could take this deal.'
Both sides would waive tariffs on some products, including aircraft, spirits and medical devices, the people said.
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Trump and Japan reach trade deal with tariff rate set at 15%
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The European Commission, which runs EU trade policy, briefed envoys from member states on Wednesday following talks with US counterparts.
News of the prospective deal boosted the euro, which recouped earlier losses to trade flat on the day against the dollar. US stocks extended gains, with the S&P 500 up 0.6 per cent.
The EU's exporters have been paying an additional 10 per cent tariff on goods sent to the US since April while talks between Washington and Brussels continued. That was on top of pre-existing duties averaging 4.8 per cent.
The people said they understood the 15 per cent minimum tariff would include those existing duties, so Brussels views the deal as cementing the status quo. Tariffs on cars, which are currently 27.5 per cent, would therefore fall to 15 per cent.
Two of the people said the deal struck between the US and Japan had pushed Brussels towards grudging acceptance of a higher reciprocal tariff rate to avert a damaging trade war.
The EU could still retaliate if Trump tried to push further or followed through on his threat to raise reciprocal duties to 30 per cent from August.
That could include activating its anti-coercion instrument (ACI) – its so-called trade bazooka. Never before used, it would give Brussels leeway to block US companies from public tenders, revoke intellectual property protection and restrict imports and exports.
The bloc will continue to prepare a possible €93 billion package of retaliatory tariffs, set at up to 30 per cent, in case they could not agree a deal by August 1, the people added.
A US official said the situation was fluid and subject to change.
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Copyright The Financial Times Limited 2025
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Irish Examiner
3 hours ago
- Irish Examiner
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