Trump, EU's Von der Leyen seek deal to end transatlantic tariffs standoff
GLASGOW – European Union chief Ursula von der Leyen is set to meet US President Donald Trump on July 27 to clinch a trade deal for Europe that would likely see a 15 per cent baseline tariff on most EU goods but end months of uncertainty for EU companies.
Before the meeting, expected at 1530 GMT (11.30pm Singapore time) on Mr Trump's golf course in Turnberry, western Scotland, American and European teams were in final talks on tariffs for crucial sectors like cars, steel, aluminium and pharmaceuticals.
US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick flew to Scotland on July 26 and EU Trade Commissioner Maros Sefcovic arrived early on July 27.
'We're cautiously optimistic that there will be a deal reached,' said a Trump administration official, who spoke on condition of anonymity. 'But it's not over till it's over.'
Ambassadors of EU governments, on a weekend trip to Greenland organised by the Danish presidency of the EU, held a teleconference with EU Commission officials on July 27 to agree on the amount of leeway Dr Von der Leyen would have in the talks.
In case there is no deal and the US imposes 30 per cent tariffs from Aug 1, the EU has prepared counter-tariffs on €93 billion (S$140 billion) worth of American goods.
EU diplomats have said a deal would likely include a broad 15 per cent tariff on EU goods imported into the US, mirroring the US-Japan trade deal, along with a 50 per cent tariff on European steel and aluminium for which there could be export quotas.
The EU deal would be a huge prize, given that the US and EU are each other's largest trading partners by far and account for a third of global trade.
EU officials are hopeful that a 15 per cent baseline tariff would also apply to cars, replacing the current 27.5 per cent auto tariff.
Possible exemptions
Some expect the 27-nation bloc to be able to secure exemptions from the 15 per cent baseline tariff for its aerospace industry and for spirits, though probably not for wine.
The EU could also pledge to buy more liquefied natural gas from the US, a longstanding offer, and boost investment in the United States.
Mr Trump told reporters there was 'not a lot' of wiggle room on the 50 per cent tariffs that the US has on steel and aluminium imports, adding, 'because if I do it for one, I have to do it for all'.
The US president, in Scotland for a few days of golfing and bilateral meetings, told reporters upon his arrival late on July 25 that Dr Von der Leyen was a highly respected leader, and he was looking forward to meeting with her.
He said there was a 50-50 chance that the two sides could reach a framework trade pact, adding that Brussels wanted to 'make a deal very badly'.
The EU now faces US tariffs on more than 70 per cent of its exports, with 50 per cent on steel and aluminium, an extra 25 per cent on cars and car parts on top of the existing 2.5 per cent and a 10 per cent levy on most other EU goods.
Mr Trump has said that without a deal, he would hike the rate to 30 per cent on Aug 1, a level EU officials said would wipe out whole chunks of transatlantic commerce.
Further tariffs on copper and pharmaceuticals are looming.
The uncertainty and higher tariffs have already hit profits of EU companies in several sectors.
A 15 per cent tariff on most EU goods would remove uncertainty but would be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal on all industrial goods.
Seeking to learn from Japan, which secured a 15 per cent baseline tariff with the US in a deal earlier this week, EU negotiators spoke to their Japanese counterparts in preparation for the July 27 meeting.
For Mr Trump, aiming to reorder the global economy and reduce decades-old US trade deficits, a deal with the EU would be the biggest trade agreement, surpassing the US$550 billion (S$705 billion) deal with Japan.
So far, he has reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of '90 deals in 90 days.' REUTERS
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