EU Races Against Clock: Trump Tariff Deadline Looms

The European Union is in a frantic race against time, with just two days left to strike a trade deal with the US and avert President Trump’s looming tariff threats. Trump’s administration is pushing for significant import taxes, potentially reaching up to 50% on EU goods, and even higher at 70% on others. This escalating tension has already cast a shadow over the global economy, causing businesses to halt investments and the dollar to experience its worst performance in half a century. As the July 9th deadline approaches, the EU grapples with internal divisions on whether to pursue a deal at any cost or stand firm if terms are unfavorable.
US Treasury Secretary Scott Bessent confirmed that negotiations have been ongoing, even through the weekend, focusing on numerous agreements with key partners. Trump’s history of aggressive rhetoric towards the EU, once labeling it “nastier than China,” underscores the pressure on Brussels. A stark example of this pressure was the recent threat of 17% tariffs on EU food imports, directly conveyed to Trade Commissioner Maroš Šefčovič during discussions with senior US officials. The initial 90-day pause on “liberation day” tariffs, announced on April 2nd, is set to expire on Wednesday, July 9th, with only the UK and Vietnam having secured deals so far.
The critical question now is whether the EU can achieve anything beyond a “political framework agreement” to simply 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 significant jump from the 2% average prior to Trump’s election last year. This expectation stems from the EU’s recent concession that a comprehensive trade deal is no longer attainable.
Instead, the focus has shifted to securing an agreement in principle, or a “framework deal,” mirroring the UK’s recently implemented agreement. While EU diplomats initially dismissed the UK deal as flimsy and potentially non-compliant with WTO rules, hoping the bloc’s greater economic influence would yield a superior outcome, they now recognize that a bare-bones deal might be the best they can hope for as the deadline rapidly approaches.