The European Commission is willing to accept a trade agreement with the United States that includes a universal 10% tariff on its exports, but it seeks commitments from Washington to lower tariffs in key sectors such as pharmaceuticals, alcoholic beverages, semiconductors, and commercial aircraft.
According to a report by Bloomberg, the EU is also pressuring the U.S. for quotas and exemptions in order to significantly reduce the 25% tariff the U.S. has imposed on cars and their parts, as well as the 50% tariff on steel and aluminum.
The European Commission, which is responsible for the EU’s trade matters, views this agreement as slightly favorable to the U.S., but still considers it a deal it could agree to, according to sources.
The Deadline
The EU has until July 9 to finalize a trade agreement with the Trump administration before tariffs are increased to 50%.
The U.S. president has imposed tariffs on nearly all of the country’s trading partners, stating that he wants to bring industrial production back home, fund tax cuts, and prevent other countries from exploiting the U.S.
Any agreement would also cover tariffs and non-tariff barriers, purchases of key American goods, and would reference areas of strategic cooperation, according to sources.
Ongoing Talks
EU Trade Chief, Maroš Šefčovič, will lead a delegation to Washington this week in an attempt to push the negotiations forward, the same sources reported.
The EU still believes that a framework agreement remains the best-case scenario, but officials have not been able to clarify how long such temporary arrangements would last as negotiations continue.
The EU’s Objective
The EU seeks to address non-tariff barriers mainly through its “simplification agenda” and has proposed the possibility of strategic purchases in various sectors, such as liquefied natural gas and artificial intelligence technologies. The Union is also open to cooperating with the U.S. on common economic security challenges.
The EU estimates that U.S. tariffs now cover exports worth €380 billion to the U.S., or about 70% of its total exports to the American market.
