EU closing in on ‘framework' trade deal with US to avoid Trump's 50% tariffs
Talks in Washington could go down to the wire, but multiple diplomats and officials said the EU was now willing to accept Trump's 10% blanket tariffs. However, negotiators will accept this only in exchange for an extension in talks and possible concessions on a 25% car tariff, which is hurting the German car industry, sources said.
Trump has threatened to impose 50% tariffs on all EU goods from 9 July unless the two sides reach a deal. Most EU goods already face a 10% tariff, with levies of 25% on cars and car parts and 50% on steel and aluminium.
The EU's trade chief, Maroš Šefčovič, who is in Washington seeking to seal an agreement, has been granted an unexpected meeting with the US commerce secretary, Howard Lutnick, on Thursday afternoon.
Šefčovič will also meet the trade representative Jamieson Greer and the treasury secretary, Scott Bessent, who has been closest to Trump in other key talks including with China.
The push to go for a narrowly focused agreement in principle comes days after the German chancellor, Friedrich Merz, reiterated his calls for a 'quick deal'. 'It is better to achieve a quick and simple solution than a lengthy and complicated one that remains in the negotiation stage for months,' Merz said in Berlin.
Merz said a quick deal was needed 'to remove the burden of tariffs on our businesses, which are far too high'. He added that the current talks were 'not about a minutely detailed trade deal' but 'the quick resolution of a tariff dispute'.
Šefčovič was seeking a standstill clause to provide 'guarantees that the US can stand over' that there would be no imposition of new tariffs in any extension period, said one politician with knowledge of the talks.
One EU diplomat said they expected a deal 'if not this week then before Wednesday', as it was 'in everybody's interest'.
'It will be very high level, but enough for Trump to declare victory,' said one source. Some believe that a deal could even be struck this week, giving Trump a significant announcement on 4 July independence day celebrations on Friday.
Talks between the EU and the US have been ongoing since early April when Trump, in a theatrical 'liberation day' presentation, imposed tariffs on 60-plus countries. He has concluded a formal deal with only one of those countries, the UK, although he claims to have some agreements struck with Vietnam and China.
One source told how the EU delegation that flew to Washington for talks in April were handed a 'massive tome' on the US's 'grievances, country by country'. They added: 'There were about 30 pages on the EU alone.'
Sources in Berlin said Merz took some time to persuade the European Commission president, Ursula von der Leyen, to switch tack and pursue a UK-style approach.
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On Thursday, von der Leyen said: 'Indeed, what we are aiming at is an agreement in principle, because [with] such a volume, in 90 days, an agreement in detail, it's impossible … That is also what the UK did. And as far as I'm informed, there are only two countries so far worldwide that have concluded with an agreement in principle.'
Others said Trump's frustration lay with the approach of a European institution used to dealing with 27 member states and the minute detail of regulation.
They also indicated that the US's latest proposal – sent to EU leaders last Wednesday – 'did not include any details on … concessions from the US side'.
In a briefing to EU ambassadors this week, von der Leyen's chief of staff, Bjoern Seibert, and the director general of the commission's trade department, Sabine Weyand, told member states the US wanted deals on four areas including tariffs.
The other three issues were strategically important sectors such as pharmaceuticals and semiconductors, economic purchases such as oil and gas and non-trade barriers including tech regulation, and food and car regulation, all red lines for the EU.
Šefčovič is expected to brief European ambassadors on the latest state of play again on Friday afternoon.
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