The US is nearing a trade deal with Europe. Will Trump stand in the way?

Yahoo

5 days ago

The president of the European Commission, Ursula von der Leyen, is flying to Scotland to meet directly with President Donald Trump on Sunday, in a sign that a trade deal with America's largest trading partner is within sight.
But European diplomats aren't counting on a deal until it is officially rolled out, after being burned before by Trump's penchant for last-minute reversals.
That's because the president's modus operandi when it comes to trade deals is clear: He wants to deal one-on-one with foreign leaders, applying an arm twist at the highest level to try and eke out final concessions. That doesn't work as well with the European Union, the 27-nation bloc that makes decisions, literally, by committee.
That fundamental issue has turned the talks between the EU and the Trump administration into a series of stops and starts, as negotiators painstakingly piece together compromises, only for them to be slapped down when presented to Trump or European countries. And it's why, even as the von der Leyen-Trump meeting raises hopes of reaching a deal to avoid a stiff U.S. tariff increase Aug. 1, they are not counting on it.
'Nothing is agreed until everything is agreed,' said one EU diplomat. 'I guess everyone is quite tense,' said another.
Trump himself underscored the uncertainty Friday after touching down in Scotland for what initially was billed as a weekend golf getaway. "I will be meeting with the EU on Sunday and we will be working on a deal. ... Ursula will be here. A highly respected woman. So, we look forward to that. That will be good," he told reporters, adding, "I think we have a good 50-50 chance. That's a lot."
Asked about what issues are still under discussion, he replied, "I don't want to tell you what the sticking points are. But the sticking points are having to do with maybe 20 different things. You don't want to listen to all of them."
Trump has repeatedly expressed frustration about dealing with the EU, a bloc that he claims was created to 'screw' the U.S. One senior White House official said Trump still holds out hope, however improbable, of cutting deals with individual EU member countries, particularly Germany, whose influential auto sector has been pummeled by Trump's 25 percent tariff on cars and car parts. Per EU rules, however, only the European Commission can negotiate trade deals for member countries, with input from the European Parliament and the heads of state for each nation.
'Yes, it's complicated with the EU,' said the official, who was granted anonymity to describe the president's thinking on the matter. 'But if some of these countries had the opportunity to do a deal with us on their own, they would jump at the chance.'
It's true that, as Treasury Secretary Scott Bessent has observed on several occasions, the EU 'has a collective action problem,' with leading economies like Germany and France pushing different priorities and negotiating strategies. Germany's conservative Chancellor Friedrich Merz has lobbied hard for an accord that would offer some relief to the country's powerful auto industry, while French President Emmanuel Macron has led calls to tough things out with Trump by backing retaliatory tariffs and calling to activate the EU's so-called trade bazooka — the Anti-Coercion Instrument — an all-purpose weapon that would only need supermajority support to hit back against the U.S.
But Merz and Macron met in Berlin on Wednesday and pledged to present a united front on trade issues during a series of meetings seeking to bolster a flailing Franco-German relationship. And EU countries on Thursday approved plans to retaliate with tariffs on approximately $109 billion worth of U.S. goods, if no deal materializes and the U.S. ratchets up its duties.
More problematic at this point: Trump's penchant for adding his own last-minute spin to the trade agreements his negotiators have spent months hashing out, sometimes to the point where he has sent countries back to the negotiating table. With each of the preliminary deals the administration has reached this summer, Trump has held a final call with the country's leader, using the opportunity to demand additional concessions or alter key terms in his government's favor.
That may not work with von der Leyen, who acts on behalf of the bloc's members and doesn't have the discretion to accept last-minute changes.
'I might anticipate that there would be some latitude from the Commission,' said Daniel Mullaney, a former assistant U.S. trade representative who negotiated with Europe. 'But yeah, if something comes in at the last minute which is outside of the realm of what was consulted on with the member states, it could be challenging.'
The EU is currently rallying around a deal that would apply a 15 percent tariff on goods from its member states — higher than the current 10 percent rate that Trump imposed on all countries in early April but half the 30 percent rate the president threatened in a July 12 letter.
According to four diplomats, who were granted anonymity to discuss the confidential negotiations, the deal would largely mirror an accord the U.S. clinched with Japan earlier this week. Cars and car parts would also see their tariff reduced from the 25 percent duty Trump set on all auto imports in May to 15 percent. Other sectors that got hit by U.S. tariffs, like steel and aluminum, are still under discussion.
According to one EU official, the 50 percent tariff Trump has imposed on steel and aluminum remains a key sticking point, as well as other sector-specific tariffs the White House is threatening on industries like pharmaceuticals, semiconductors and aerospace. 'There is total uncertainty on that, what we can get on that,' said the official, who was granted anonymity to discuss the private conversations.
Trump on Friday played down the chances of lowering his steel tariffs, telling reporters he did not have much wiggle room to provide more generous terms because 'if I do it for one, I have to do it for all.'
The EU has already been close to a deal once before but has been confounded by what they see as Trump's unpredictable behavior. Members said that they had an agreement waiting for Trump's approval earlier this month but that the president rejected it because it was too bureaucratic, according to two EU officials who were briefed on the discussions, granted anonymity because of the sensitivity of the talks. One official said Trump "smacked it down for the lack of enough 'wins.''
A White House official, granted anonymity to discuss private conversations, said no agreement was reached earlier this month; instead, the EU had sent an offer, and the administration did not find it suitable. The official agreed that any final deal with the EU will be decided by Trump. "He's ultimately the one who makes the deal," the official said.
Other world leaders have confronted similar problems — and concluded that the only way to address the issue is to hold one-on-one meetings with Trump, as British Prime Minister Keir Starmer is doing this weekend in Scotland. While Starmer and Trump reached a preliminary trade deal in May to lower some U.S. duties on British goods, they have yet to come to hash out the terms for a promised 'alternative arrangement' for steel and aluminum tariffs, a top priority for the British government.
The golfing visit is "an opportunity for the PM to build personal rapport with Trump,' said one U.K. government adviser, granted anonymity to speak candidly about the visit. 'They have a good relationship, but this is where Starmer will need to shine in an informal setting."
Trump has recently insisted that any trade deal will require other countries to open their markets. The president has claimed that Indonesia, the Philippines and Vietnam will drop all tariffs on U.S. goods as part of their trade agreements. Officials from those countries, however, have either not substantiated or have publicly challenged those claims.
On Tuesday, he announced a deal with Japan in which the country has pledged to lower tariff barriers on U.S.-made cars and import more agricultural goods, like rice.
Trump told reporters Friday morning that while he wasn't overly confident about reaching a deal with the EU, he was still more optimistic than he had been about coming to terms with Japan in the days before that agreement was finalized.
'I would have said we have a 25 percent chance with Japan. And they kept coming back, and we made a deal,' he said.
Dan Bloom and Andrew McDonald contributed to this story from London. Koen Verhelst contributed from Brussels.
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