Big EU–US deal faces meltdown over Trump, auto tariffs, and angry farmers
Donald Trump, President of the US (photo: Getty Images)
A trade deal between the U.S. and the EU is facing resistance over tariffs on agricultural products and automobiles, with a key decision left up to Trump. Negotiations are ongoing, but the outcome remains unpredictable, according to Bloomberg.
As of today, both the US and the EU are trying to find common ground to finalize a major tariff agreement, but key issues remain unresolved.
For instance, the EU is pushing for a cap on agricultural export tariffs at 10%, while the US insists on maintaining flexibility in its tariff policy - a stance that is hindering progress. Both sides have yet to agree on terms that would allow for a breakthrough in the coming days.
In addition, political uncertainty surrounding former President Donald Trump’s stance is creating further risks for sealing the deal.
Automobiles and agriculture - sticking points
According to sources close to the negotiations, the EU is insisting on a tariff cap of no more than 10% on agricultural exports to the US.
Meanwhile, American car manufacturers have proposed a compensation mechanism that would grant them benefits in exchange for investing in US-based production. However, Europe fears this could encourage the relocation of manufacturing across the Atlantic, undermining the bloc’s economic interests.
Negotiators on both sides are currently focusing on resolving disputes over auto tariffs, which remain the main obstacle to reaching an agreement.
Trump’s role in the negotiations
A key factor that could influence the outcome of the negotiations remains the stance of US President Donald Trump.
Sources say he may derail the agreement, as he has yet to issue an official position on the current state of talks or the proposed new tariffs. Any final decisions are expected to hinge on his attitude, especially given his previous unilateral actions on tariffs for steel and aluminum.
Notably, the European Commission has refrained from commenting while negotiations are still ongoing, underscoring the sensitivity and unpredictability of the process.
Trump’s tariffs
Back in April this year, US President Donald Trump imposed tariffs against almost all countries worldwide.
However, the American leader later paused this decision for 90 days to negotiate trade agreements with other countries.
On Thursday, July 10, Trump announced that starting August 1, he would impose 35% tariffs on Canadian imports to the US, and also plans to apply tariffs of 15–20% to other trade partners.
He also recently stated that the US will continue trade cooperation with Moldova, though some changes are expected.
