Trade deal on US tariffs within reach, says EU, as 1 August deadline nears
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EU nears trade deal with US as tariff deadline looms
Trade Deal Between US and EU Nears as August 1 Tariff Deadline Approaches
EU Pushes for Agreement Amid Tariff Threat
The European Union says a trade deal with the United States is “within reach,” as both sides work to prevent the enforcement of a proposed 30% tariff on EU imports by the August 1 deadline. US President Donald Trump has warned that if the EU does not open its markets to American businesses, the tariffs will be imposed.
Progress in Talks Sparks Optimism
EU diplomats have hinted that the US is now considering a more moderate 15% tariff instead of the 30% initially proposed. Though the European Commission declined to confirm specific details, a spokesperson said negotiators were working “might and main” to protect European businesses and consumers from the economic fallout of a trade conflict.
White House Responds Cautiously
White House spokesperson Kush Desai emphasized that any reports about a pending deal remain speculative until officially confirmed by President Trump. Trump has remained firm on his stance, stating he will only reconsider the tariffs if the EU agrees to give US companies better access to European markets.
US Treasury and European Leaders Weigh In
US Treasury Secretary Scott Bessent expressed confidence, suggesting that progress was being made in the ongoing talks. Meanwhile, European Central Bank President Christine Lagarde noted that resolving trade uncertainties would help stabilize financial markets. The ECB has kept interest rates unchanged at 2%, following recent cuts aimed at buffering the economy.
Business Leaders Urge Resolution
Bernard Arnault, CEO of French luxury group LVMH, urged both sides to find common ground. Comparing the situation to the US-Japan trade deal, he warned that a trade war with the US Europe’s largest market would be damaging. “We cannot afford to fall out with the United States,” he told Le Figaro.
EU Prepares Countermeasures if Talks Fail
The EU has so far avoided imposing retaliatory tariffs, despite European exporters already dealing with a 10% hike under the Trump administration, in addition to pre-existing duties of 4.8%. However, the European Commission has warned that if no deal is reached, it will implement a €93 billion ($109 billion) package of countermeasures starting August 7.
Two-Stage Retaliation Plan in Place
This includes an existing list of €21 billion in tariffs created in response to US levies on European steel and aluminum in March. A second list, valued at €72 billion, has now been prepared, targeting a wider range of goods such as bourbon whiskey, cars, aircraft parts, chemicals, poultry, and denim.
EU’s Tougher Measures on Standby
The EU also holds a more aggressive strategy known as the anti-coercion instrument (ACI). This “nuclear option” could involve restrictions on American services and intellectual property, although there is little appetite for deploying such measures at this stage. Still, France has called for a firmer EU stance.
France Calls for Stronger EU Response
French Industry Minister Marc Ferracci said earlier this week that if talks fail, Europe must act decisively. He warned that the proposed US tariffs would severely impact French industry, putting entire sectors in “mortal danger.” Ferracci advocated for the deployment of new defensive trade tools to shield European industries.
Conclusion: Window for Diplomacy Narrowing
As the deadline nears, both sides are scrambling to strike an agreement. While optimism remains, the EU has made clear it is ready to retaliate if necessary. The next few days will be crucial in determining whether a damaging transatlantic trade war can be avoided.
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