- Uncertainty persists about when a trade agreement between the U.S. and EU may be struck.
- U.S. President Donald Trump has suggested an agreement could come as soon as this week, however.
Because it is still unclear whether a trade agreement with the United States might be completed, the European Union (EU) is in a state of uncertainty.
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A temporary reprieve from U.S. President Donald Trump’s “reciprocal” tariffs was originally scheduled to end on July 9, and the goal had been to reach a consensus on a framework by then. Earlier in the week, it appeared that the EU was still operating on this timeframe.
However, the trading partners have yet to reach a consensus, and that time has already gone.
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However, Trump himself said on Tuesday that a framework might still be formed as early as this very week.
“We probably won’t be writing them for another two days. We are speaking with them,” he stated, implying that a letter would indicate that a tariff agreement had been struck. Trump claimed on social media on Monday that 14 nations had received letters specifying new tariff rates, but the EU had not yet received one.
However, Trump also said that the U.S. and EU were communicating better.
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“Until recently, they treated us horribly; now, they treat us extremely well. He said at a Cabinet meeting on Wednesday at the White House, “It’s like a different world.” “They were among the toughest to deal with.”
Trump, who has frequently criticized the trade relationship between Washington and Brussels, saying it is unfair and unequal, changed his tone with this.
The European Council estimates that in 2024, commerce between the United States and the European Union was approximately 1.68 trillion euros ($1.97 trillion) in both commodities and services. The EU’s overall trade surplus last year was over 50 billion euros, with a surplus in the trade of products but a deficit in the trade of services.
Meanwhile, U.S. Commerce Secretary Howard Lutnick hinted that a deal might be possible.
“The European Union, to their credit, has now made significant, real offers, meaning we’re going to take down our barriers, we’re going to open our markets to American farmers, ranchers, and fishermen, really open their markets, and let Americans, finally American entrepreneurial spirit, get to sell to Europe,” he stated during his Tuesday appearance on CNBC’s Power Lunch.
“The president’s got those deals on his desk and he’s thinking about how he wants to play them,” he stated.
In the hopes of negotiating some exemptions or reaching other agreements on particular industries, the EU is generally expected to agree to a 10% baseline tariff. This is far less than the 50% tariff that Trump had previously demanded.
“We stick to our principles, we defend our interests, we continue to work in good faith, and we get ready for all scenarios,” European Commission President Ursula von der Leyen told the European Parliament on Wednesday, appearing hesitant in her reaction to Trump’s remarks.
Peter Chase, senior fellow at the German Marshall Fund, stated in an interview with CNBC’s “Squawk Box Europe” on Wednesday that the question was not whether a 10% duty was appropriate for Europe, but rather for the United States in the end.
“You know, it’s the importer who pays the tariff, not the exporter,” he stated. “If the Europeans have a tariff of 10% and Korea has a tariff of 25% then … an American business is paying more for the same product from Korea than it would be paying for one from Europe,” Chase stated.
Accordingly, European companies would “deal with it, but it’s the American customer that’s the one that will be paying for it,” he described.
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