The Financial Times reported that the U.S. and European Union are moving toward a trade agreement which would establish 15% tariffs on EU imports following the Japan-U.S. agreement this week.
The sources indicate that both parties are considering exemptions for specific products including aircraft and spirits and medical equipment from the new duties. The Brussels government continues to prepare a €93 billion ($109 billion) retaliatory tariff package with maximum rates of 30% in case negotiations fail before August 1 according to the Trump administration deadline.
The European Commission stated on Wednesday that it continues to pursue a negotiated settlement to prevent a complete tariff war.
The U.S. imported more than €47 billion worth of vehicles and automotive parts from the EU during 2024 at a level comparable to Japanese imports. The auto sector shows significant differences in export levels between the U.S. and Europe.
The ongoing negotiations indicate that the U.S. is developing a standardized approach to trade talks to reduce tariff unpredictability while preserving its negotiating power.
European automakers welcomed the positive market reaction because investors believed a settlement would prevent economic damage from rising tariffs and trade uncertainties.
