Trump's 50% tariff threat looms: EU considers temporary trade deal with US; Von der Leyen pushes for ‘agreement in principle'
The European Union is considering a temporary trade agreement with the United States that would maintain a 10 percent tariff on most exports, according to a briefing by the European Commission to EU ambassadors on Friday, reported news portal Politico.
The update came after a key round of negotiations in Washington on Thursday, where EU trade commissioner Maroš Šefčovič aimed to defuse US President Donald Trump's threat to impose a sweeping 50 percent tariff on all European imports starting July 9, if a deal is not reached.
Talks will continue on potential exemptions for certain sectors, including the automotive industry, two national officials familiar with the discussions said, according to the news portal..
However, the outcome was seen as underwhelming in several European capitals, especially after earlier signals from the Commission's negotiating team that some industries could receive immediate tariff relief. The US currently imposes tariffs of 25 percent on cars and 50 percent on steel and aluminum imports.
EU remains divided
Despite intensive negotiations, reaching a consensus on a trade agreement with the United States remains challenging for European Commission President Ursula von der Leyen, amid ongoing divisions among EU member states over how to proceed.
According to three diplomats, all possibilities, including a failure to reach any deal, are still being considered.
In a fresh twist, US officials have reportedly threatened to impose a 17 percent tariff on European food imports, two national officials confirmed, backing a report by the Financial Times.
Von der Leyen is expected to hold one-on-one consultations with EU leaders over the weekend before deciding on the bloc's next steps, one official said.
Meanwhile, Trump is likely to meet with his advisers on Monday, meaning any official announcement would be delayed until after those discussions.
Division into three categories
According to an EU diplomat, the European Commission expects President Donald Trump to classify America's trade partners into three distinct groups.
In the first category, countries where provisional agreements have been reached would see a continued pause on 'reciprocal' tariffs, with the possibility of additional tariff relief later.
The second category includes countries where no agreement has been reached; here, the country-specific tariffs announced by Trump in April, 20 percent in the EU's case, would be reinstated while negotiations continue.
In the third category, countries with stalled or unsuccessful talks would face higher tariffs, which would remain in place until further notice.
Limited deal amid divisions
Ursula von der Leyen paved the way for a minimal trade agreement on Thursday, stating her goal was to secure an 'agreement in principle.'
The move would follow a similar approach taken by the United Kingdom, which maintained a baseline tariff while securing exemptions for key sectors like automobiles and steel as broader negotiations continued.
However, ahead of Friday's briefing, several EU member states cautioned that such a deal would be unacceptable without a clear and immediate commitment from President Donald Trump to lift tariffs on critical industries.
German Chancellor Friedrich Merz has pushed for a swift agreement, particularly to secure lower tariffs for Germany's major export sectors. In contrast, countries including France, Spain, Italy, and Denmark have urged the Commission to negotiate a more comprehensive and balanced arrangement with Washington.
Meanwhile, Brussels has kept a potential second wave of retaliatory tariffs, valued at €100 billion on hold, in an effort to give negotiations room to advance and to avoid escalating the ongoing transatlantic trade tensions.
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