Trump, EU's von der Leyen meet to clinch trade deal, rating chances 50-50

Reuters

3 days ago

TURNBERRY, Scotland, July 27 (Reuters) - European Commission President Ursula von der Leyen met U.S. President Donald Trump on Sunday to clinch a trade deal that would likely result in a 15% tariff on most EU goods, but end months of uncertainty for European Union companies.
U.S. and EU negotiators huddled in final talks on tariffs facing crucial sectors like cars, steel, aluminium and pharmaceuticals before the meeting began at Trump's golf course in Turnberry, western Scotland.
Trump, who had earlier played a round with his son, told reporters as he met von der Leyen that he wanted to correct a trading arrangement he said was "very unfair to the United States" and repeated his comments from Friday that the chances of a U.S-EU deal were 50-50, a view echoed by von der Leyen.
"We have three or four sticking points I'd rather not get into. The main sticking point is fairness," he said insisting the EU had to open up to American products.
Von der Leyen acknowledged there was a need for "rebalancing" EU-U.S. trade.
"We have a surplus, the United States has a deficit and we have to rebalance it... we will make it more sustainable," she said.
U.S. Commerce Secretary Howard Lutnick, who flew to Scotland on Saturday, told "Fox News Sunday" that the EU needed to open its markets for more U.S. exports to convince Trump to reduce a threatened 30% tariff rate that is due to kick in on August 1.
"The question is, do they offer President Trump a good enough deal that is worth it for him to step off of the 30% tariffs that he set," Lutnick said, adding that the EU clearly wanted - and needed - to reach an agreement.
A separate U.S. administration official was upbeat that a deal was possible. "We're cautiously optimistic that there will be a deal reached," the official said, speaking on condition of anonymity. "But it's not over till it's over."
The EU deal would be a huge prize, given that the U.S. and EU are each other's largest trading partners by far and account for a third of global trade in goods and services.
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 Sunday to agree on the amount of leeway von der Leyen would have.
In case there is no deal and the U.S. imposes 30% tariffs from August 1, the EU has prepared counter-tariffs on 93 billion euros ($109 billion) of U.S. goods.
EU diplomats have said a deal would likely include a broad 15% tariff on EU goods imported into the U.S., mirroring the U.S.-Japan trade deal, along with a 50% tariff on European steel and aluminium for which there could be export quotas.
EU officials are hopeful that a 15% baseline tariff would also apply to cars, replacing the current 27.5% auto tariff.
Some expect the 27-nation bloc may be able to secure exemptions from the 15% 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 U.S., a long-standing offer, and boost investment in the United States.
Trump told reporters there was "not a lot" of wiggle room on the 50% tariffs that the U.S. has on steel and aluminium imports, adding, "because if I do it for one, I have to do it for all."
The U.S. president, in Scotland for a few days of golfing and bilateral meetings, said a deal with the EU should draw to a close discussions on tariffs, but also said pharmaceuticals, for which the United States is looking into new tariffs, would not be part of a deal.
The EU now faces U.S. tariffs on more than 70% of its exports, with 50% on steel and aluminium, an extra 25% on cars and car parts on top of the existing 2.5% and a 10% levy on most other EU goods. EU officials have said a "no-deal" tariff rate of 30% would wipe out whole chunks of transatlantic commerce.
A 15% 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% baseline tariff with the U.S. in a deal almost a week ago, EU negotiators spoke to their Japanese counterparts in preparation for Sunday's meeting.
For Trump, aiming to reorder the global economy and reduce decades-old U.S. trade deficits, a deal with the EU would be the biggest trade agreement, surpassing the $550 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."