President Donald Trump declared that the U.S. would lower tariffs if the European Union opens its markets to American products. The statement followed his announcement of a new trade deal with Japan during a Washington event.
European sources confirm that U.S. steel tariffs will remain outside the proposed framework agreement, maintaining the current 50% levy while a separate 15% baseline tariff is negotiated. The European Commission updated EU member states on the talks, urging unity and discouraging bilateral deals with Washington. Brussels awaits a formal U.S. response to the proposed framework.
Italian Deputy Prime Minister Antonio Tajani cautioned that negotiations remain volatile: “The 15% flat tariff was an American proposal, but talks are ongoing.” He emphasized currency concerns, stating the euro’s strength against the dollar effectively imposes “an extra premium beyond tariffs.” Tajani called for aggressive European Central Bank action to weaken the euro, citing pandemic-era monetary policies as a model.
European stock markets rallied on news of the U.S.-Japan agreement, with Paris gaining 1.37% to 7,850 points, London up 0.42% to 9,061 points, Frankfurt rising 0.83% to 24,240 points, and Madrid increasing 0.31% to 14,165 points.
Negotiation Deadline Looms**
With talks approaching a point of no return, an EU-U.S. framework agreement centered on a 15% base tariff—with mutual exemptions—is expected to reach Trump’s desk imminently. Diplomatic sources stress that “the final decision rests with Trump,” warning that failure could trigger a transatlantic trade war.
The 15% rate is considered broadly acceptable among EU members as it would automatically reduce current tariffs on key sectors like automotive (now at 27.5%). In exchange, the EU may recognize certain U.S. technical standards. The rate incorporates the Most Favored Nation (MFN) clause, which currently maintains average bilateral tariffs at 4.8%. Exemption discussions continue for aerospace, agricultural products, alcohol, timber, and medical devices.
Contingency Measures Advance**
The EU is preparing to merge two retaliatory tariff lists totaling €93 billion ($21bn + €72bn), pending approval by the Trade Barriers Committee on August 7. This escalation coincides with growing support among member states for activating the “bazooka” Anti-Coercion Instrument should talks collapse, enabling measures like investment restrictions, public contract exclusions, and intellectual property suspensions.
Notably, Trump refuses to reduce the 50% steel tariff. Tensions also persist over U.S. tech giants’ compliance with EU digital regulations, which the U.S. State Department recently labeled “Orwellian censorship.”
EU Commission President Ursula von der Leyen has not scheduled last-minute talks with Trump. Instead, she launched a “Competitiveness Alliance” with Japan to reform the WTO, before proceeding to a high-stakes summit with China’s Xi Jinping.
© Copyright ANSA. All rights reserved.