Trump, EU chief seek deal in transatlantic tariffs standoff

Khaleej Times

5 hours ago

US President Donald Trump and EU chief Ursula von der Leyen prepared to meet Sunday in Scotland in a push to resolve a months-long transatlantic trade standoff that is going down to the wire.
Trump has said he sees a 50-50 chance of reaching a deal with the European Union, having vowed to hit dozens of countries with punitive tariffs unless they hammer out a pact with Washington by August 1.
The EU is currently facing the threat of an across-the-board levy of 30 percent from that date.
Von der Leyen's European Commission, negotiating on behalf of the EU's member countries, has been pushing hard for a deal to salvage a trading relationship worth an annual $1.9 trillion in goods and services.
Any deal with the United States will need approval by all 27 member states. EU ambassadors, on a visit to Greenland, were to meet Sunday morning to discuss the latest negotiations -- and again after any accord.
Sunday's sit-down between Trump and the EU chief was to take place at 4:30 pm (1530 GMT) in Turnberry, on Scotland's southwestern coast, where Trump owns a luxury golf resort.
The 79-year-old American leader said Friday he hoped to strike "the biggest deal of them all" with the EU.
"I think we have a good 50-50 chance" of a deal, the president said, citing sticking points on "maybe 20 different things".
He praised von der Leyen as "a highly respected woman" -- a far cry from his erstwhile hostility in accusing the EU of existing to "screw" the United States.
But late-night EU talks with US Commerce Secretary Howard Lutnick on Saturday to hammer out the final details were "combative at times," The Financial Times reported.
As of Saturday evening, there were "still quite a few open questions" -- notably on pharmaceutical sector tariffs, said one EU diplomat.
Tariff levels on the auto sector were also crucial for the Europeans -- notably France and Germany -- and the EU has been pushing for a compromise on steel that could allow a certain quota into the United States before tariffs would apply.
Baseline 15%
According to European diplomats, the deal on the table involves a baseline levy of around 15 percent on EU exports to the United States -- the level secured by Japan -- with carve-outs for critical sectors including aircraft, lumber and spirits excluding wine.
The EU would commit to ramp up purchases of US liquefied natural gas, along with a series of investment pledges.
Hit by multiple waves of tariffs since Trump reclaimed the White House, the EU is currently subject to a 25-percent levy on cars, 50 percent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatens to hike to 30 percent in a no-deal scenario.
The EU has focused on getting a deal with Washington to avoid sweeping tariffs that would further harm its sluggish economy, with retaliation as a last resort.
While 15 percent would be much higher than pre-existing US tariffs on European goods -- at 4.8 percent -- it would mirror the status quo, with companies already facing an additional flat rate of 10 percent.
Should talks fail, EU states have greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels is also drawing up a list of US services to potentially target.
Beyond that, countries like France say Brussels should not be afraid to deploy a so-called trade "bazooka" -- EU legislation designed to counter coercion through trade measures which involves restricting access to its market and public contracts.
But such a step would mark a major escalation with Washington.
Ratings dropping
Trump has embarked since returning to power on a campaign to reshape US trade with the world.
But polls suggest the American public is unconvinced, with a recent Gallup survey showing his approval rating at 37 percent -- down 10 points from January.
Having promised "90 deals in 90 days," Trump's administration has so far unveiled five, including with Britain, Japan and the Philippines.
Early Sunday, ahead of his meeting with Von der Leyen, Trump was out again on the golf course, having spent most of Saturday playing at Turnberry amid tight security.
The trip to Scotland has put physical distance between Trump and the scandal around Jeffrey Epstein, the wealthy financier accused of sex trafficking who died in prison in 2019 before facing trial.
In his heyday, Epstein was friends with Trump and others in the New York jet-set, but the president is facing backlash from his own MAGA supporters demanding access to the Epstein case files.
With the uproar refusing to die down, a headline agreement with the EU -- in addition to bolstering Trump's dealmaker credentials -- could bring a welcome distraction.