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Europe, America in no-deal deadlock: EU envoys to discuss plan ahead of Trump's Aug 1 deadline
EU diplomats are gearing up to convene as early as this week to devise strategies for a potential no-deal outcome with US President Donald Trump, whose tougher stance on tariffs looms large before the August 1 deadline.
Negotiations with Washington remain the EU's priority to resolve the deadlock by next month. However, Bloomberg has reported, citing sources familiar with the matter, that last week's talks in Washington have not produced any desired progress. Discussions are set to continue over the next two weeks.
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US pushing for near-universal tariff on EU goods
According to the report, the US is pushing for a near-universal tariff on EU goods exceeding 10 per cent, with limited exemptions for aviation, certain medical devices, generic medicines, select spirits, and specific manufacturing equipment critical to the US.
Earlier this month, Trump warned the EU of a 30 per cent tariff on most exports starting August 1.
He has already imposed a 25 per cent levy on cars and auto parts, 50 per cent on steel and aluminium, and recently announced a 50 per cent levy on copper.
Additional duties on pharmaceuticals and semiconductors are threatened for next month. The EU estimates these US tariffs already affect €380 billion ($442 billion), or roughly 70 per cent, of its exports to the US.
The EU is seeking broader exemptions and protection from future sectoral tariffs, acknowledging that any deal will likely favour the US. Bloomberg previously noted that the EU will evaluate the overall imbalance of any agreement before considering retaliatory measures.
EU prepares for no-deal outcome
With a deal looking less likely and the deadline approaching, the EU is preparing contingency plans for swift action if talks fail, the report said. Retaliation would likely require approval from EU leaders due to the high stakes, potentially widening the transatlantic trade rift, especially given Trump's warnings that countermeasures would trigger harsher US responses.
The EU has already greenlit potential tariffs on €21 billion of US goods, targeting politically sensitive states like Louisiana—home to House Speaker Mike Johnson—with products like soybeans, poultry, motorcycles, and other agricultural goods.
A further €72 billion in US products is lined up for tariffs in response to Trump's reciprocal and automotive levies.
Last week, Bloomberg reported growing support among EU member states to deploy the anti-coercion instrument (ACI) if no acceptable deal is reached and Trump follows through on his threats.
The ACI would allow the EU to impose measures like taxes on US tech giants, restrictions on US investments, or limits on US firms' access to EU markets and public contracts.
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Designed as a deterrent, the ACI targets deliberate coercive trade actions by third countries. While the European Commission can propose its use, EU member states decide if coercion exists and whether to activate it.
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