EU Leaders Weigh Quick Trade Deal with US Amid Tariff Threats
Brussels, Belgium – European Union leaders are set to decide today whether to pursue a swift trade agreement with the United States, even if it favors Washington’s terms, or to continue negotiating for a more favorable deal. Officials and diplomats suggest that a quick resolution appears to be the preferred path for most EU members, allowing the bloc to potentially implement its own rebalancing measures later.
German Chancellor Friedrich Merz expressed strong support for the European Commission’s efforts to achieve a fast trade agreement with the US, stating, “I want us to get Mercosur off the ground and conclude further trade agreements. Europe is facing decisive weeks and months.”
The European Commission, responsible for negotiating trade deals on behalf of the EU, will seek direction from the leaders of the 27 member states, who are meeting in Brussels. The discussion comes less than two weeks before President Donald Trump’s July 9 deadline for a trade agreement.
While the EU aims for a mutually beneficial deal, Washington appears committed to its 10% across-the-board tariffs on most EU goods, with threats of even higher rates if talks drag on. Consequently, a growing number of EU countries are now leaning towards a quick resolution.
Belgian Prime Minister Bart De Wever emphasized the need to avoid a trade war, calling it “just stupid.” He added that if the outcome is “one-sided and unfair tariffs,” the EU must implement “proportionate and very targeted countermeasures.”
Currently, the EU faces US import tariffs of 50% on steel and aluminum, 25% on cars and car parts, and 10% on most other goods. Trump has warned that these tariffs could surge to 50% without an agreement. The US’s only completed trade deal to date is with Britain, which still maintains the 10% tariff, a rate US officials indicate won’t be lowered for any trading partner. Many leaders arriving in Brussels directly from the NATO summit in The Hague are unlikely to want to escalate into an economic conflict.
“There is a group of EU countries that want to protect companies by seemingly accepting something they have gotten used to – a 10% baseline,” an EU diplomat noted.
Potential Rebalancing Measures
A key decision for EU leaders is whether to respond with their own measures to the US’s baseline tariff. The EU has already agreed upon, but not yet imposed, tariffs on €21 billion worth of US goods and is considering an additional package targeting up to €95 billion in US imports. Some EU countries, however, favor softening these proposed tariffs.
Among the potential rebalancing options is a tax on digital advertising, which would impact major US tech companies like Google (Alphabet Inc.), Meta, Apple, X, and Microsoft. This measure aims to offset the US’s trade surplus in services with the EU, given that the bloc has a trade surplus with the US in goods.
The Commission has proposed an EU-US deal to eliminate respective tariffs on industrial goods and potentially increase EU purchases of liquefied natural gas and soybeans. However, Washington has shown little interest, preferring to highlight perceived barriers such as EU value-added tax, environmental standards, and online platform regulations—areas where the EU is unwilling to compromise.
Russia Sanctions and Gas Concerns
On the sidelines of the summit, EU leaders will also attempt to alleviate concerns from Slovakia and Hungary regarding the termination of their access to Russian gas, as per the EU’s plan to phase out all Russian gas imports by the end of 2027. EU diplomats believe that assurances on gas supply should enable these two countries to support the EU’s 18th package of sanctions against Russia, which they are currently blocking. However, before the summit began, Slovak Prime Minister Robert Fico stated he would demand a delay in voting for the sanctions until Slovakia’s concerns are addressed.
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