Trade deal with Trump in jeopardy, EU ambassadors to prepare response plan - Bloomberg

According to the agency, the vast majority prefers to continue negotiations with the United States to find a way out of the situation before August 1 (the day when the 30% duty is to take effect).

At the same time, according to sources, last week's talks in Washington have not yet brought any steady progress. They will continue over the next two weeks.

The sources also said that the United States will now seek to impose a virtually universal tariff on goods exceeding 10%.

At the same time, fewer and fewer exceptions will apply to aviation, some medical devices and generics, several types of alcoholic beverages, and a certain set of manufacturing equipment that the United States needs.

The two sides also discussed possible ceilings for some sectors, as well as quotas on salt and aluminum, and how to protect supply chains from sources with an oversupply of metals.

The sources warned that even if a deal is reached, it will require Trump's approval, but his position is unclear.

According to the people, as the prospects for a positive outcome of the talks become less likely and the deadline approaches, the EU is expected to start preparing a contingency plan in case no agreement is reached.

At the same time, any decision to take retaliatory measures is likely to require political approval of the bloc's leaders, as the stakes are very high.

Trump's tariffs

Earlier this month, Trump sent a letter to the EU warning that the bloc would face a 30% tariff on most of its exports starting August 1.

In addition to the general duty, the US president had previously imposed a 25% tariff on cars and auto parts, as well as a double duty on steel and aluminum.

In addition, he threatened to impose new tariffs on pharmaceuticals and semiconductors next month and recently announced a 50% tariff on copper.

All in all, the EU estimates that US tariffs already cover 380 billion euros, or about 70% of the bloc's exports to the US.

EU response

Before Trump's letter, the EU had hoped that he was moving towards an initial framework that would allow for further detailed discussions based on a universal rate of 10% on many of the bloc's exports.

However, as things stand, the EU is also preparing retaliatory measures. The bloc has already approved potential duties on €21 billion worth of US goods that could be quickly imposed in response to Trump's metals tariffs.

These measures are targeted at politically sensitive US states and cover products such as soybeans from Louisiana, as well as other agricultural products, poultry, and motorcycles.

In addition, the EU has prepared a list of additional duties on US products worth €72 billion in response to the so-called reciprocal duties and tariffs on cars. They will affect industrial goods, including Boeing airplanes, American-made cars, and bourbon.

In addition, work is underway on potential measures that go beyond tariffs, such as export controls and restrictions on government procurement.