Last-Minute Push: EU Scrambles to Avoid Trump’s Trade Assault

The European Union is engaged in a last-ditch effort to secure a trade agreement with the United States, as President Trump’s July 9th deadline for restoring potentially severe tariffs draws near. With only two days left for negotiations, the stakes are incredibly high, as the failure to reach a deal could lead to tariffs as high as 50% on EU imports, and up to 70% on others. This global economic uncertainty has already led to a halt in business investments and the dollar’s weakest performance in half a century during the first six months of the year. The core debate within the EU centers on whether to prioritize avoiding a trade war at all costs or to resist a potentially “imbalanced” deal.
US Treasury Secretary Scott Bessent confirmed that the negotiations, including those held over the weekend, are focused on a series of agreements with important trading partners. The aggressive approach from the Trump administration, exemplified by past statements describing the EU as “nastier than China,” has been a consistent feature of these talks. A recent incident involved a threat of 17% tariffs on EU food imports to Trade Commissioner Maroš Šefčovič during discussions with senior US officials. The 90-day pause on “liberation day” tariffs, which began on April 2nd, is due to expire this Wednesday, with only the UK and Vietnam having successfully concluded deals.
The rapidly approaching deadline raises concerns about the EU’s ability to achieve more than a “political framework agreement” to extend talks, potentially leaving the existing 10% baseline tariff and other levies on cars, steel, and aluminum in place. European industries are bracing for increased costs, anticipating a minimum 10% tariff on exports to the US, a stark increase from the 2% average before Trump’s election last year. This shift in expectations comes after the EU acknowledged that a comprehensive trade deal is no longer feasible.
As a result, the EU is now aiming for an agreement in principle, or a “framework deal,” similar to the one recently implemented with the UK. While EU diplomats initially dismissed the UK deal as inadequate and potentially in violation of World Trade Organization rules, and had hoped their greater economic leverage would secure a more favorable outcome, they now accept that a basic agreement might be the best they can achieve under the circumstances.