The European Union and the United States are reportedly nearing a “political understanding” to resolve their ongoing tariff dispute.
“This would not be a detailed, comprehensive trade deal, but rather a political understanding laying the groundwork for more concrete arrangements,” according to diplomats.
U.S. President Donald Trump imposed a blanket 10% tariff on most U.S. trading partners and unveiled higher individual rates on dozens of economies, including the European Union—although he swiftly paused the elevated rates.
The pause on those higher duties is due to expire on July 9, though the White House has indicated it could extend the deadline for countries that it believes are negotiating in good faith.
The U.S. president also imposed additional sector-specific levies on cars, steel, and aluminum that have hit many U.S. trading partners hard, including the EU. The U.S. currently imposes tariffs of 50% on EU steel and aluminium, 25% on cars, and 10% on all EU imports.
According to diplomats briefed by the European Commission, the incoming agreement would not eliminate all tariffs immediately. Instead, it may maintain a baseline 10% tariff on many EU industrial exports—lower tariffs might then be negotiated for strategic sectors such as aircraft.
With Trump threatening to raise tariffs to 50% should no agreement be reached, the pressure is mounting. EU Trade Commissioner Maroš Šefčovič heads to Washington this week, seeking to finalise a basic deal and avoid economic fallout.
