EU and US closing on 15% tariff deal to break impasse
Member states could be ready to accept a 15% tariff and EU officials are pushing to have that cover sectors including cars, the diplomats said. Steel and aluminium imports above a certain quota would face the 50% duty, one of the diplomats added.
The diplomats said that while the EU is optimistic that a deal can be reached, they are also cautious that any final agreement will need sign off from US president Donald Trump and his ultimate decision is difficult to predict.
The EU has prepared plans to hit the US with 30% tariffs on some €100bn worth of goods in the event of no deal and if Mr Trump carries through with his threat to impose that rate on most of the bloc's exports after August 1.
As a part of a first wave of countermeasures, the EU would combine an already approved list of tariffs on €21bn of US goods and a previously proposed list on an additional €72bn of US items into one package, a European Commission spokesman said yesterday.
The US exports, which include industrial goods such as Boeing aircraft, US-made cars, and bourbon whiskey, would face a levy that matches Mr Trump's 30% threat, sources said.
US treasury secretary Scott Bessent dismissed talk of €100bn tariffs by the EU as a 'negotiating tactic', adding: 'It's what I would do if I were in their place'.
Mr Trump announced two tariff deals on Tuesday — one with the Philippines and another with Japan, and both featured across-the-board duties on their imports that were lower than initially threatened. Also noteworthy was the 15% US levy on Japanese autos that was lower than the current 25% rate on major car exporters including the EU.
Mr Bessent said the EU has not yet brought anything as innovative as the Japanese offer. 'Talks are going better than they had been,' he said. 'I think that we are making good progress with the EU, but as I've said before, the EU has a collective action problem with 27 countries.' The EU's most potent trade tool is the ACI, and a growing number of member states is pushing for its use if a deal isn't reached. The instrument is primarily designed as a deterrent and is currently not on the table, with its activation requiring a qualified majority of member states to support the move. The ACI would enable the EU to launch a broad range of retaliatory actions, including new taxes on US tech giants, targeted curbs on investments, and limiting access to the EU market.
The commission is discussing the instrument with members, the sources said. While some capitals having been pushing to use the tool, most want to wait to see how the situation develops beyond August 1 before progressing discussions further to try to achieve the required majority, they added.
The overwhelming preferencewas to keep negotiations with Washington on track.
European leaders are in Tokyo and Beijing this week for talks with some of the bloc's biggest trading partners in Asia.
European automakers' stocks rallied after the US-Japan trade deal sparked hopes that American import tariffs on their vehicles could be cut.
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