US, EU Nearing Trade Deal With 15% Tariffs

Aircraft, Auto Exemptions Eyed as Tensions Ease

The United States and the European Union are reportedly close to a landmark trade agreement that would set tariffs at 15% on EU imports, a move that could avert steeper 30% duties scheduled to take effect next month.

Deal Avoids Higher Tariffs

Sources indicate that US President Donald Trump may accept the 15% tariff rate to prevent the imposition of higher penalties. This potential agreement follows closely on the heels of a similar trade deal struck between the US and Japan.

The EU’s executive commission has briefed member states on the ongoing negotiations. If finalized at the 15% level, it would bring EU tariffs closer to those seen in the recent US-Japan agreement. Some analysts suggest the EU may be accepting the higher rate to stave off a broader trade war.

Key Sectors Face Exemptions

Negotiations are also reportedly nearing a consensus on excluding certain key sectors from tariffs. Items such as aircraft, distilled spirits, and medical devices are among those expected to receive exemptions, easing concerns for major European industries.

Under the proposed terms, the current 27.5% tariff on automobiles could also be reduced to 15%. However, reports suggest that existing tariffs on steel products might remain unchanged at 50%.

European Leaders Weigh In

German Chancellor Friedrich Merz acknowledged hearing positive news regarding the customs talks ahead of a meeting with French President Emmanuel Macron. Macron emphasized the desire for stability and mutual respect in trade relations, stating, Europe, of course, wants to be respected as a partner.

Uncertainty Remains

Despite optimism from European officials, US representatives caution that the situation remains fluid. The final decision still rests with President Trump, making the outcome uncertain. The EU, meanwhile, continues to prepare a retaliatory tariff package totaling approximately $80 billion (93 billion euros) in case the negotiations fail.

This contingency plan includes measures targeting aircraft, automobiles, and bourbon whiskey, a response to previous US tariffs on steel and aluminum. The EU is scheduled to vote on these retaliatory measures on the 24th.

However, reports indicate that retaliatory actions will only be triggered if negotiations collapse and the US imposes its threatened tariffs starting next month. The ongoing trade dialogue aims to foster a more stable economic environment, a sentiment echoed by European leaders seeking predictable partnership. The precedent set by the US-Japan trade talks may offer a roadmap for resolving these critical economic discussions.