"50-50 Or Less": Trump On Possibility Of European Union Trade Deal

NDTV

15 hours ago

US President Donald Trump estimated Friday there was a 50 percent chance of Washington being able to strike a deal with the European Union to reduce import tariffs.
In an attempt to slash his country's trade deficits, Trump has vowed to hit dozens of countries with punitive tariff hikes if they do not hammer out a pact with Washington by August 1.
"I would say that we have a 50/50 chance, maybe less than that, but a 50/50 chance of making a deal with the EU," Trump told reporters while leaving the White House for a trip to Scotland.
His administration promised "90 deals in 90 days" as it delayed the imposition of higher duties in April, but has so far unveiled just five agreements, including with Britain, Japan and the Philippines.
The EU's 27 countries have been allowing the European Commission to focus on seeking a deal to avoid hefty US tariffs, with Trump threatening 30-percent levies without an accord by month's end.
Brussels and Washington appear to be inching towards a deal with a baseline 15-percent US levy on EU goods, and potential carve-outs for critical sectors, multiple diplomats have told AFP.
But EU states on Thursday backed a package of retaliation on $109 billion (93 billion euros) of US goods -- to kick in from August 7 if talks fall short.
Trump claimed that most of the deals he was seeking had been completed, although he made clear that he was talking about sending letters imposing tariffs on US trade partners, rather than negotiating free trade agreements.
Tariffs charged on other countries are ultimately passed on as a sales tax to US consumers, because they are paid by importers, not the country supplying the goods or services.
"I don't want to hurt countries, but we're going to send a letter out some time during the week, and it's basically going to say, 'You're going to pay 10 percent, you're going to pay 15 percent, you're going to pay maybe less,' I don't know," Trump told reporters.
Trump said his negotiators were working "diligently" with EU officials, but he added that "we haven't really had a lot of luck" in talks with Canada, which Trump has threatened with a 35 percent tariff.
The United States and China, Washington's third-biggest partner in goods trade this year, have the "confines of a deal," Trump told reporters.
Stock Markets Stall
Stock markets stalled Friday as the latest trade-related rally lost steam and US President Donald Trump rated the chances of Washington striking a trade deal with the European Union at barely 50/50.
Wall Street indices stood barely in the green some 20 minutes into the session as investors also digested a mixed batch of corporate earnings, while major European indices were all down and Asia closed off.
Equities have enjoyed a strong run for much of July on expectations that governments will reach agreements with the United States to dodge threatened tariffs before next Friday's deadline.
But Trump cautioned that in his view striking a deal with the European Union to reduce import tariffs will be a challenge.
"I would say that we have a 50/50 chance, maybe less than that, but a 50/50 chance of making a deal with the EU," Trump told reporters at the White House.
Sentiment had been lifted earlier in the week by the announcement of a Japan-US deal, as well as signals that the EU could be closing in on its own accord with Washington.
The "momentum has not been kept up, and European stocks are weaker at the end of the week," said Kathleen Brooks, research director at trading group XTB.
Trade optimism stayed cautiously upbeat, as Brussels and Washington appeared close to a deal that would halve Trump's threatened 30 percent levy, with a European Commission spokesman saying he believed an agreement was "within reach".
However, "there has been no confirmation from the US side... thus, sentiment towards European assets could be fragile as we lead up to that August 1 tariff deadline", Brooks added.
The EU is still forging ahead with contingency plans in case talks fail, with member states approving a 93 billion-euro ($109 billion) package of counter-tariffs.
With few positive catalysts to drive buying, Asian markets turned lower heading into the weekend.
Tokyo retreated after a two-day rally and Hong Kong declined following five days of gains. Shanghai was also down.
While the S&P 500 and Nasdaq hit new records Thursday, another round of strong jobs data suggested the US Federal Reserve might have to delay cutting borrowing costs.
The dollar extended gains against its major peers as investors trimmed their rate forecasts.
The US president once again pressed Fed chief Jerome Powell to slash interest rates during a visit to its headquarters on Thursday.