EU nears trade deal with US to avert Trump's steep tariffs

The EU and US are nearing a broad agreement on trade that would prevent 50% tariffs on all bloc exports starting next Wednesday, a deadline set by Donald Trump.

Negotiations in Washington may continue until the last moment, but officials and diplomats indicate the EU is prepared to accept a 10% across-the-board tariff in exchange for extended talks and potential adjustments to a 25% car tariff, which has heavily impacted Germany's auto sector.

Trump has warned of imposing 50% duties on all EU goods from 9 July unless an agreement is reached. Currently, most EU products face a 10% tariff, while cars and car parts are taxed at 25%, and steel and aluminium at 50%.

Maroš Šefčovič, the EU’s lead trade negotiator, is in Washington attempting to finalize terms. He secured an unplanned meeting with US Commerce Secretary Howard Lutnick on Thursday afternoon.

Šefčovič will also speak with Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent, who has worked closely with Trump in previous high-stakes talks, including those with China.

The move toward a limited agreement follows recent comments by German Chancellor Friedrich Merz, who urged a swift resolution. "A simple, fast agreement is preferable to prolonged, complex talks that drag on for months," Merz stated in Berlin.

He emphasized the need to ease the "excessive burden" of tariffs on businesses, clarifying that discussions focus on resolving the dispute quickly rather than crafting a detailed trade deal.

A political insider familiar with negotiations said Šefčovič sought assurances that no new tariffs would be introduced during any extension period.

An EU diplomat predicted a deal "this week or before Wednesday," noting it served mutual interests. Another source suggested an agreement could be finalized this week, allowing Trump to announce it during 4 July celebrations.

Discussions began in early April after Trump introduced tariffs on over 60 countries in a high-profile declaration. To date, only the UK has secured a formal deal, though Trump asserts progress with Vietnam and China.

One source described the EU delegation receiving an extensive document outlining US grievances per country in April, with around 30 pages dedicated to the EU alone.

Reports from Berlin indicate Merz convinced European Commission President Ursula von der Leyen to adopt a UK-style negotiation strategy.