Breaking EU diplomats downbeat as US trade deal not yet reached
The deadline to reach agreement expires next Wednesday, when a 90-day pause on higher tariff rates runs out.
The assessment comes following a long briefing of EU ambassadors by the EU's trade commissioner Maros Sefcovic in Brussels this afternoon.
It followed his 48 hour trip to Washington where he held talks with the US trade, commerce and treasury secretaries.
According to one EU diplomat, the Commission believes the US will address various trading partners according to three separate categories early next week.
Under the first scenario, the current reciprocal tariff pause would remain for those trading partners where agreement in principle has been reached, with possible further tariff relief later.
A second scenario would see previous country-specific tariffs reinstated where there are ongoing negotiations, but no agreement in principle yet.
In that scenario tariffs on EU goods would revert to the 20% rate first announced on 2 April, during President Trump's so-called "Liberation Day" announcement and would remain until a final deal is done.
A third scenario would be a return to the previous 20% tariff rate which would remain until further notice.
"It's still unclear how Trump would classify the EU, but from these talks it's clear that in all scenarios above an imbalance in trade measures between the EU and US remains," said the diplomat.
"This begs the question, asked by a number of ambassadors today, how we prepare to remedy that imbalance."
The EU is currently subject to a 10% tariff across the board, while cars and car parts are subject to a 25% tariff, and steel and aluminium are tariffed at 50%.
The EU suspended €22 billion in retaliatory tariffs in response to the steel and aluminium tariffs, and has €95 billion worth of tariffs on US goods in reserve for further counter measures if there is no deal next week.
Sources have been pessimistic about a positive outcome next week, although diplomats say contacts will continue over the weekend.
Diplomats have said it is unclear if the US side has agreed to any sectoral carve outs, such as pharmaceuticals, semiconductors or aviation - a key EU demand - as the minimum the EU has sought to rebalance the lingering 10% tariff.
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