EU and US locked in talks ahead of key Trump meeting with von der Leyen
Leaders due to meet on Sunday in bid to avoid economically damaging transatlantic trade war
EU and US trade negotiators have been locked in intense talks ahead of a meeting between Donald Trump and Ursula von der Leyen in Scotland on Sunday, as Brussels strives for a deal with Washington to avoid an economically damaging transatlantic tariff war.
The European Commission president, who flew to Glasgow on Saturday evening, will meet the US president on Sunday afternoon for talks that EU negotiators hope will seal a trade pact to avoid 30 per cent US tariffs on European goods and a probable retaliation by Brussels.
Negotiators are circling a deal that would set tariffs of around 15 per cent on most US imports from the EU, mirroring a pact the US struck with Japan this week.
But talks between US commerce secretary Howard Lutnick and senior EU officials continued late into Saturday night as they sparred over the final details on the level of tariffs that would apply to EU steel, automotive and pharmaceutical products, people briefed on the discussions told the FT. They added that the talks were combative at times.
Lutnick and US trade representative Jamieson Greer remained in Washington on Saturday, but are expected to arrive on Sunday morning at Trump’s luxury Turnberry golf resort on Scotland’s south-west coast to finalise any deal.
Trump has threatened to impose 30 per cent tariffs on all EU exports into the US if no deal is reached by August 1. That would be in addition to the 25 per cent tariffs on cars and car parts and 50 per cent levies on steel and aluminium already in place. Trump has also launched probes that could lead to tariffs on chips, pharmaceuticals and aerospace parts.
A growing number of EU member states are calling for Brussels to trigger already-prepared retaliatory tariffs on almost €100bn of US goods if the talks collapse.
The two sides — whose €1.6tn trade relationship in 2023 made it one of the world’s largest — have been negotiating a possible deal for almost four months. During this time the US has been charging an additional 10 per cent on EU products, along with 25 per cent on cars and 50 per cent on steel and aluminium.
The EU has been a frequent victim of Trump’s escalating rhetoric against major US trading partners and allies, with the president accusing the bloc of “ripping off” America.
On Friday as Trump arrived in Scotland, where he is also playing golf and meeting UK officials, the US president said there were around 20 “sticking points” still to be agreed with the EU. The bloc “want[s] to make a deal very badly”, he added.
Ambassadors from EU member states are set to meet on Sunday morning to be given an update on the talks. They will also need to approve any possible deal struck by Trump and von der Leyen, EU officials have confirmed.
If there is a deal, Brussels will suspend the implementation of tariffs of up to 30 per cent on €93bn-worth of US imports from August 7.
If not, some member states are pushing the Commission to seek approval to trigger its most potent trade weapon, the anti-coercion instrument, early next week.
Never before used, the first stage would require Brussels to determine there was coercion. If it does, a weighted majority of member states could then approve a wide range of retaliatory measures.
Officials said these could include charges on digital advertising sales that would hit tech companies, and excluding US companies from public tenders.