BRUSSELS — The European Union is weighing a provisional trade deal with the United States that would maintain a 10 percent tariff on most exports, the European Commission told EU ambassadors on Friday.
The EU executive reported back after a crucial round of talks in Washington on Thursday, in which Trade Commissioner Maroš Šefčovič sought to head off a threat by President Donald Trump to impose a 50 percent tariff on all European goods from July 9 if no deal is reached.
In addition to the baseline tariff, conversations would continue on providing relief to specific industry sectors such as cars, two national officials cited top Commission officials as saying.The outcome fell short of expectations in European capitals after the Commission’s trade negotiating team had previously said the possibility of “up-front” tariff relief for some industries was under consideration. The U.S. levies 25 percent tariffs on cars and 50 percent on steel and aluminum.
Despite the intensive talks, a landing zone for an agreement remains potentially difficult for von der Leyen, with divisions lingering between EU countries over how to approach the negotiations. All options — including no deal — remain on the table, according to three diplomats.
Before confirming the provisional agreement, Commission President Ursula von der Leyen is expected to consult individually with EU leaders over the weekend to decide on the way forward, said one of the officials, who like the others cited in this story was granted anonymity to discuss the sensitive matter.
Trump was due to consult with his advisers on Monday, according to two EU diplomats, meaning a formal announcement would likely only come later.
Rule of three
In the view of the Commission, Trump is expected to lump America’s trade partners into three categories, according to another EU diplomat. In a first, the pause in his “reciprocal” tariffs would remain where provisional agreement has been reached, while further tariff relief at a later stage was possible.
In a second category, the country-specific tariffs announced by Trump in April — in the EU’s case 20 percent — would be reinstated where no agreement has been reached while negotiations are ongoing. And, a third, those country tariffs would remain until further notice as long as talks are going badly.
Von der Leyen prepared the ground for a bare-bones deal on Thursday, saying she was aiming for an “agreement in principle.” This would mirror an earlier deal struck by the U.K. with Washington that kept a baseline tariff and exempted auto and steel exports while talks on a broader accord continue.
Several member states warned ahead of Friday’s update that such an agreement would not be acceptable without an immediate commitment from Trump to relieve key sectors from tariffs.
German Chancellor Friedrich Merz had pressed for a quick deal, along with lower tariffs for his country’s main export industries. In the opposing camp, countries such as France, Spain, Italy and Denmark are arguing that the Commission should push for a better and more balanced agreement with the Trump administration.
Brussels has meanwhile kept a second raft of retaliation to the U.S. tariffs, worth €100 billion, on the back burner to allow space for the negotiations to progress and avoid creating the impression that it wants to escalate the transatlantic trade dispute.
Camille Gijs and Koen Verhelst reported from Brussels. Nette Nöstlinger reported from Berlin. Nicholas Vinocur, Tim Ross and Gabriel Gavin contributed reporting.
This story has been updated.
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