The European Union has said it believes a deal on trade tariffs with the US is “within reach”, ahead of a 1 August deadline when President Donald Trump has threatened to impose a sweeping 30% levy on EU imports.
Hopes were raised after EU diplomats suggested the US had proposed a broad 15% tariff on most European imports.
A European Commission spokesman refused to speculate on the latest talks on Thursday, but said EU negotiators were working “might and main” to deliver a deal for Europe’s consumers and companies.
White House spokesman Kush Desai said earlier that any talk about deals should be seen as “speculation” unless it was confirmed by the president.
Trump said on Wednesday that his condition for withdrawing the threatened 30% levy on EU imports was “if they agree to open up the [European] Union to American businesses”.
US Treasury Secretary Scott Bessent suggested good progress with the EU was being made.
The European Central Bank left interest rates unchanged at 2% on Thursday, after a series of rate cuts in recent months, and ECB President Christine Lagarde said “the sooner this trade uncertainty is resolved… the less uncertainty we’ll have to deal with”.
The chief executive of French luxury group LVMH, Bernard Arnault, said an accord similar to the one Japan reached with the US had to be reached amicably.
“We cannot afford to fall out with the United States and engage in a trade war with our companies’ main market,” he told Le Figaro newspaper in France.
The EU had initially hoped for a 10% baseline in US import tariffs, along the lines of a deal the US agreed with the UK, until Trump sent a letter threatening a 30% tariff.
Until now, the EU has refrained from imposing counter-tariffs on the US, even though European companies have faced an extra 10% levy on exports, on top of an average duty of 4.8% they faced before the Trump presidency.
However, if President Trump does not approve an EU accord, then member states have agreed to hit back with a list of countermeasures on US goods worth a total of €93bn (£81bn; $109bn) that would kick in days after the US tariffs.
“These countermeasures will automatically click into force on 7 August should a negotiated outcome not happen before then,” European Commission spokesman Olof Gill told reporters.
“Right now the EU is focused on finding a negotiated outcome with the US,” he said, while stressing that a “twin-tracks” approach meant that it was prepared to react without a deal.
The €93bn in countermeasures are made up of an initial list of €21bn – drawn up in retaliation for 25% US tariffs imposed last March on imports of European steel and aluminium – and a new list of €72bn.
The first tariffs, thought to target imports such as Harley-Davidson motorcycles, poultry and jeans, have been repeatedly suspended in recent months in the hope of reaching a deal.
The new €72bn in countermeasures are said to include proposed tariffs on bourbon whiskey, chemicals, cars, aircraft and aircraft parts.
Another option in the EU’s armoury, described as its nuclear option or trade “bazooka”, is to impose restrictions on America’s powerful service sector as well as intellectual property rights.
The anti-coercion instrument (ACI), to give its formal name, was drawn up two years ago to act as a powerful deterrent when a non-EU country resorted to unfair coercion to affect European trade or investment.
At the moment, there is little support across the EU for this level of retaliation to be on the table, but earlier this week, French Industry Minister Marc Ferracci suggested Europe should adopt a firmer approach and deploy new tools.
Warning that 30% tariffs would have dramatic consequences for French industry and place some sectors in “mortal danger”, Ferracci said various responses would need to be deployed in the event of a failure to reach a deal by 1 August.
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