U.S., EU Trade Deal Still Possible Ahead of August 1 Tariff Deadline, Commerce Secretary Says

With only days before sweeping prices should take effect, the US trade secretary Howard Lutnick says that there is still a strong possibility of obtaining a trade agreement with the European Union, signaling prudent optimism despite increasing global trade tensions.

In an interview on Face The Nation of CBS on Sunday, Lutnick said that he had just spoken with EU business negotiators and thinks that there is “a lot of place” to conclude an agreement before the deadline of August 1 set by President Donald Trump.

“These are the two biggest trade partners in the world, who are talking about each other. We are going to conclude an agreement. I am convinced that we are going to conclude an agreement,” he said.

However, he stressed that the date of August 1 remains a “lasting due date”, after which new prices will be triggered automatically if no agreement is concluded.

“Nothing prevents countries from talking to us after August 1, but they will start to pay the prices on August 1,” warned Lux.

Ultimatum Trump tariff

On July 12, President Trump announced a radical plan to impose prices on several major American trade partners, notably the European Union and Mexico. The samples offered include a price of 30% on most imports from the EU and Mexican, as well as general rates ranging from 20% to 50% on other nations such as Japan, Brazil and Canada. The president also threatened a high rate of 50% on imported copper.

In an official letter addressed to the president of the European Commission Ursula von der Leyen and to communications similar to other leaders, Trump has described the intention of his administration to rebalance what he described as “deeply unfair” trade relations. He accused some partners of having exploited the American markets and of not corresponding to the opening of America with reciprocal treatment.

Trump’s decision is in the midst of the growing frustration of the slowness of commercial negotiations and increasing concerns concerning the American manufacturing sector, which has struggled to grow despite the previous tariff rollbacks of the administration.

EU pressure

Although the European Commission has not publicly disclosed the details of the current talks, sources in Brussels told Politico Europe that those responsible were constantly working to negotiate a temporary understanding before the deadline. European leaders are particularly concerned about the potential repercussions of prices on the automotive, agricultural and aerospace sectors – which would all be affected significantly if American measures come into force.

Some EU members also put pressure for the block to prepare reprisals if they prevail. Germany, in particular, which is strongly based on car exports to the United States, would have urged a more conciliatory approach to avoid an escalation which could harm its already weakened economy.

USMCA can also be reopened

In a significant quarter of work, Lutnick also said that Trump was planning to reopen the agreement of the United States-Mexico-Canada (USMCA), the agreement on the trade of the signing of his first mandate. Although the agreement currently exempts most North American prices, Lutnick suggested that a renegotiation could start “a year from today”.

Lutnick said the president would absolutely renegotiate the USMCA without providing details on the changes that the administration can look for. Although the goods currently in accordance with the original rules of the USMCA are exempt from imminent prices, this protection could be short -lived if Washington reopens the pact.

Still for potential impacts

Wall Street and industry leaders have warned that a new wave of prices could take a major blow to the world markets. Goldman Sachs analysts noted in a research note that increased rights could stir up inflation and disturb the supply chains already tense by post-country-paying dislocations and geopolitical conflicts.

The United States Chamber of Commerce has urged the administration to delay the implementation of prices, arguing that “negotiations should not be carried out under the threat”. Meanwhile, European commercial associations claim that uncertainty already affects investment decisions.

Despite the warnings, Lutnick insisted that Trump’s difficult position is already bearing fruit. He had underlined the president’s belief to use the lever effect, noting that it works and that the countries are back to the table.

With the exhausting time, the next few days could determine whether the United States and the EU can recover an agreement or if the global economy will be plunged into another trade war. If no agreement is concluded by August 1, many European goods entering the American ports will be subject to steep tasks, potentially triggering a cycle of reprisals with large -scale economic consequences.

However, the optimism of Lunick, although reassuring for some, does not do much to calm the nerves of exporters and manufacturers who are now faced with the prospect of higher costs, delayed shipments and possible job cuts if the prices come into force.