BRUSSELS — The European Union is striving to project unity as it races to negotiate a high-stakes trade deal with Washington, but backstage, national divisions threaten to weaken its negotiating hand.
“Nobody in Europe wants to escalate,” European Council President António Costa said last weekend. “Nobody wants a conflict.“
That’s also a message EU Trade Commissioner Maroš Šefčovič will be keen to convey as he meets with U.S. Trade Representative Jamieson Greer on Thursday for a potentially decisive round of talks. It will be the last chance to clinch an initial political agreement before a July 8 deadline set by President Donald Trump to do a deal or face 50 percent “reciprocal” tariffs.
Away from the diplomatic dance, however, EU countries don’t always see eye-to-eye on how best to deal with the White House. And as so often, the diversity of views held by the bloc’s 27 national leaders — all catering to domestic interest groups and voters — is making it difficult for Šefčovič to drive a hard bargain.
The Commission is set to brief EU ambassadors on the talks on Friday. Whether it can quickly announce a breakthrough will depend largely on their feedback.
On the final stretch, Brussels continues to push to lower the baseline 10 percent tariff that Trump imposed on most U.S. trading partners in April. It has, however, signaled it could be ready to accept 10 percent should other conditions be met, such as providing immediate relief for specific industries.
“There are some differences emerging, which I think should be discussed and composed quickly, because it’s a problem,” Brando Benifei, a senior lawmaker who chairs the European Parliament’s delegation to the United States, told POLITICO in an interview.
“This emergence of diverging views from those that seem willing to accept the 10 percent as part of an agreement that would counter the rest, and those that are saying that such a high base tariff is so far from what we do on our side — it is something that should never be accepted,” added the Italian Social Democrat. “I agree with the second camp.”
A Commission trade spokesperson pushed back against that characterization of the debate.
“There has been a far higher than usual level of consultation with our member states, which is why we have had this very striking level of unity all along,” they told reporters in Brussels on Wednesday.
Heavyweights clash
German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni are the most vocal proponents of a fast deal — even at the price of greater concessions to the White House.
At a summit of EU leaders last week, Merz argued that “it’s better to act quickly and simply than slowly and in a highly complicated way.” During the discussion, he “pointed out individual industries … in Germany — the chemical industry, the pharmaceutical industry, mechanical engineering, steel, aluminum, the automotive industry — [that] are all currently being burdened with such high tariffs that it is really putting companies at risk.”
Meloni — a Trump ally — has described the 10 percent U.S. tariff as “not particularly impactful for us.” One EU diplomat, granted anonymity to speak candidly, described Rome as “quite keen to maintain good relationships and willing to accept a lot” in talks about the tariffs.
The German chancellor has mostly been pushing for lower rates for specific sectors, such as the powerful car industry that drives its export-led economy. That has gone down well in Washington, with Commerce Secretary Howard Lutnick observing last month that “Germany would like to make a deal — but they’re not allowed.”
That may not be in the wider European interest, argues David Kleimann, a senior trade expert at the ODI think tank in Brussels.
“The Commission has so far — fortunately — pushed back against the most immediate German instincts,” Kleimann said.
“At the same time, the Commission now appears to be willing to accept an agreement — with a landing zone involving sectoral carve-outs from a 10 percent U.S. baseline tariff — that would … erode fundamental principles of the rules-based trading system and undermine EU strategic autonomy.”
Symmetry in asymmetry
At the other end of the spectrum are Paris and Madrid, which want to resist the U.S. president’s roughhouse negotiating tactics, according to two EU diplomats who were granted anonymity to discuss the closed-door trade talks.
At last week’s summit, French President Emmanuel Macron — who has been pushing for weeks for Trump to remove all tariffs — initially argued against rushing to accept an “asymmetrical” agreement just to meet Trump’s deadline. At the end of the meeting, however, he indicated he might be willing to accept a 10 percent tariff under certain conditions.
“It would be best to have the lowest tariff possible, zero percent is the best. But if it’s 10 percent, it’ll be 10 percent,” he said. “If the American choice falls on 10 percent, there will be a compensation on goods sold by the United States. The levy will result in the same levy on U.S. goods.”
Spain’s Prime Minister Pedro Sánchez, meanwhile, has tasted Trump’s anger: The U.S. president threatened new tariffs against Madrid last week after Sánchez refused to increase defense spending in line with other allies at a NATO summit — even though that wouldn’t be doable as the EU’s members operate as a trade bloc.
To add spice to the mix, smaller countries are also bringing their own demands to the table — all keen to shield their own sensitive industries. Some, whose trade with the U.S. is balanced, are reluctant to take the heat for the bloc’s overall trade surplus with the U.S., for which a handful of countries led by Germany are responsible.
The split also impacts the EU’s retaliation playbook, which the Commission is preparing in order to be ready to fire back quickly if needed.
In addition to initial retaliation measures — approved but not yet implemented — targeting €21 billion in U.S. exports in response to Trump’s steel and aluminum tariffs, the Commission has proposed another €95 billion package over his reciprocal and car tariffs.
Special pleading by member countries would reduce the impact to €25 billion, the executive warned last month. Should this week’s talks fail, that discord threatens to undermine the bloc’s ability to impose significant pain on the U.S. economy when EU trade ministers meet on July 14 to take a final decision on the retaliation measures.
“Although some member states signal that they could live with the 10 percent if the rest is solved, I still think it’s not a good idea,” said Benifei, the Italian MEP. “You should have countermeasures if we end up in the deal with the 10 percent.”
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