Seeking to stave off a damaging trade war, EU trade commissioner Maros Sefcovic held discussions in Washington this week with his US counterparts. The talks were described as productive, but neither side indicated how close they were to a deal. If the EU does not clinch an agreement with the US by Wednesday, higher levies will return and unleash economic pain on the bloc.
The European Commission, which leads trade policy for the 27-country bloc, briefed EU ambassadors on Friday about how talks were going. During the meeting, a senior EU official told member states there was no deal yet but that talks would continue "likely over the weekend," an EU diplomat told AFP agency. "A first basic agreement until deadline isn't off the table. Things are still very much in flux," the diplomat said.
Another European diplomat said it was not clear yet how US President Donald Trump would classify the status of negotiations with the EU when it addresses its trading partners early next week. Trump could keep the tariff suspension for partners where there is an agreement in principle, restore tariffs if there is no deal or reimpose levies where negotiations are going badly, the diplomat said.
If no deal is struck, the default levy on EU imports is set to double to 20% or even higher, with Trump having threatened at one point to slap 50% duties. EU chief Ursula von der Leyen said on Thursday that Brussels sought an agreement in principle, which would mean further talks would be necessary on the details. But the commission believes that whatever happens, an imbalance in trade measures between the EU and the US will remain. "This begs the question, asked by a number of ambassadors today, how we prepare to remedy that imbalance," the diplomat said.
Some capitals appear to have reconciled with the prospect of the US keeping the current flat levy of 10% on EU exports, the challenge then being to negotiate carve-outs for key sectors, such as cars and aeronautics.