Trump’s 50% tariff threat looms: EU considers temporary trade deal with US; Von der Leyen pushes for ‘agreement in principle’

Donald Trump (left), Ursula von der Leyen (AP)

The European Union is contemplating a temporary trade settlement with the United States that will keep a ten % tariff on most exports, based on a briefing by the European Commission to EU ambassadors on Friday, reported information portal Politico.The replace got here after a key spherical of negotiations in Washington on Thursday, the place EU trade commissioner Maroš Šefčovič aimed to defuse US President Donald Trump’s threat to impose a sweeping 50 % tariff on all European imports beginning July 9, if a deal shouldn’t be reached.Talks will proceed on potential exemptions for sure sectors, together with the automotive business, two nationwide officers acquainted with the discussions stated, based on the information portal..However, the result was seen as underwhelming in a number of European capitals, particularly after earlier indicators from the Commission’s negotiating workforce that some industries might obtain instant tariff aid. The US at present imposes tariffs of 25 % on automobiles and 50 % on metal and aluminum imports.

EU stays divided

Despite intensive negotiations, reaching a consensus on a trade settlement with the United States stays difficult for European Commission President Ursula von der Leyen, amid ongoing divisions amongst EU member states over find out how to proceed. According to 3 diplomats, all prospects, together with a failure to succeed in any deal, are nonetheless being thought of.In a recent twist, US officers have reportedly threatened to impose a 17 % tariff on European meals imports, two nationwide officers confirmed, backing a report by the Financial Times.Von der Leyen is predicted to carry one-on-one consultations with EU leaders over the weekend earlier than deciding on the bloc’s subsequent steps, one official stated. Meanwhile, Trump is more likely to meet with his advisers on Monday, that means any official announcement can be delayed till after these discussions.

Division into three classes

According to an EU diplomat, the European Commission expects President Donald Trump to categorise America’s trade companions into three distinct teams.In the primary class, international locations the place provisional agreements have been reached would see a continued pause on “reciprocal” tariffs, with the opportunity of extra tariff aid later.The second class contains international locations the place no settlement has been reached; right here, the country-specific tariffs introduced by Trump in April, 20 % in the EU’s case, can be reinstated whereas negotiations proceed.In the third class, international locations with stalled or unsuccessful talks would face increased tariffs, which might stay in place till additional discover.

Limited deal amid divisions

Ursula von der Leyen paved the best way for a minimal trade settlement on Thursday, stating her objective was to safe an “agreement in principle.” The transfer would observe an analogous method taken by the United Kingdom, which maintained a baseline tariff whereas securing exemptions for key sectors like vehicles and metal as broader negotiations continued.However, forward of Friday’s briefing, a number of EU member states cautioned that such a deal can be unacceptable with out a clear and instant dedication from President Donald Trump to carry tariffs on essential industries.German Chancellor Friedrich Merz has pushed for a swift settlement, significantly to safe decrease tariffs for Germany’s main export sectors. In distinction, international locations together with France, Spain, Italy, and Denmark have urged the Commission to barter a extra complete and balanced association with Washington.Meanwhile, Brussels has saved a possible second wave of retaliatory tariffs, valued at €100 billion on maintain, in an effort to provide negotiations room to advance and to keep away from escalating the continuing transatlantic trade tensions.