The United States and the European Union are locked in frantic negotiations on a high-level “framework” trade agreement aimed at diverting prices of 50% that President Donald Trump promised to impose on all EU exports from July 9.
The haste to obtain a last -minute agreement comes when Trump has excluded the granting of any extension, signaling a hard approach similar to what Japan is now confronted.
The talks, which take place in Washington, intensified when the two parties are jostling to avoid a transatlantic economic deadlock which could have a serious impact on key industries such as automobile, steel, agriculture and pharmaceutical products. Diplomats say that the EU is ready to accept a 10% coverage rate on exports to the United States as a compromise – provided in Washington suspends more severe tasks and offers room for maneuver on the sector specific to the sector such as the 25% car rate that has already reached German manufacturers.
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High level but shallow: the shape of the agreement
According to sources close to the negotiations, the framework discussed would be modeled on recent “agreement in principle” signed with the United Kingdom and Vietnam. It would not be a complete trade agreement, but rather a political understanding that freezes more tariff climbing while opening the more in -depth discussion room over several months.
The president of the European Commission, Ursula von der Leyen, speaking Thursday in Brussels, recognized the limits of what could be achieved before the deadline of next week.
“Indeed, what we aim is an agreement in principle, because with such a volume, in 90 days, a detail agreement is impossible … This is also what the United Kingdom has done.”
The negotiators on the American side are the secretary of the Treasury Scott Bessent, the secretary of trade Howard Lutnick and the representative of American trade Jamieson Greer. Greer should continue to work throughout the weekend in a last effort to finalize the agreement. The EU delegation is headed by the commercial commissioner Maroš Šef? Ovi?.
Familiar sources with meetings indicate that the EU has put pressure for a “stop clause” that would block all new prices during a prolonged negotiation window – something considered to be crucial for German manufacturers and other vulnerable sectors with 50%threatened samples.
Trump does not back down the deadline
The urgency comes in the context of Trump’s “Liberation Day” prices imposed on April 2, which targeted more than 60 countries. This decision was part of a dramatic reshaping of the American trade policy, Trump declaring the need to “rebalance commercial equity” through hard line measures. Although he has granted a 90 -day break for some countries, this reprieve ends on Tuesday – and he clearly indicated that there will be no more extensions.
Asked directly if Japan or the EU would have an additional time, Trump said categorically: “No. I don’t think about the break. I will write letters to many countries.” Tokyo, who could not conclude an agreement, is now preparing for the reimposition of prices of 30 to 35% on cars and rice exports. EU negotiators are determined to avoid the same fate.
“This is not a carefully detailed commercial agreement,” said German Chancellor Friedrich Merz in Berlin. “This is the rapid resolution of a tariff dispute.” Merz would have played a key role in the persuasion of Von Der Leyen and others within the Commission to pivot towards the more flexible British style frame.
The “massive volume” and the four -point wishes list
A source from the EU revealed that during the talks in April, the block received what they described as a “massive volume” listing the country’s American grievances – on 30 pages dedicated to the EU alone. In a recent briefing at the EU ambassadors, the chief of staff of Von der Leyen and the Commercial Director of the Commission described four American priorities: tariff policy, economic purchases (such as petroleum and gas), regulation of strategic sectors (such as pharmaceutical and semiconductor standards) and non-traditional barriers, including technology, food and cars. Red lines for Brgetsets.
Above all, the last American proposal, sent to EU leaders last Wednesday, contained no reciprocal concession. This has frustrated EU diplomats, but many recognize that even a symbolic agreement would be preferable to a price shock next week.
Failure to comply with an agreement would see all EU products subject to a coverage rate of 50%, compared to the current 10%, which already include special samples such as cars of 25% and 50% rights on steel and aluminum. Such a decision could devastate German automobile exports and deepen global economic uncertainty, especially because similar threats hang to other American business partners, including Canada, Mexico and South Korea.
Despite the EU resistance to US requests for a deeper regulatory alignment in fields such as food security and car emissions, negotiators hope to carve enough progress for Trump to claim victory – possible in time for a symbolic announcement on July 4, the day of independence.
Trump’s aggressive tariff policy has sparked trade tensions not only with the EU, but around the world. Although he claims to have concluded agreements with China and Vietnam, only the United Kingdom has so far signed an official pact. Translections with Canada, India and South Korea remain in flow.
However, Trump’s refusal to extend the deadline of July 9 is interpreted as a demonstration of force – and a signal that even traditional allies will not be spared without concrete concessions.
What could mean
The United States and the EU are on the verge of a major tariff climbing which could trigger a full-fledged trade conflict if no agreement is concluded by July 9. Without extension in sight, and the discussions extending throughout the weekend, the next 96 hours can determine the trajectory of transatlantic trade for the years to come.
If a framework is secure, it will not only serve as a ceasefire, but as a facial economy mechanism for both parties, in particular Trump, which can use it as a patriotic centerpiece during independence day celebrations. But if negotiations vacillate, companies on both sides of the Atlantic could soon find themselves on the front line of a trade war that none of the savings can afford.
