USA’s decision to extend the deadline from July 9 to August 1 has come as a breather for the negotiators, but EU officials remain resolute in their determination to clinch a deal before July 14.
“We have been operating with the July 9 date in view,” Dombrovskis said, adding, “This extension gives us some breathing space, yet our focus remains undiminished”.According to EU diplomats, the European Commission, negotiating on behalf of all 27 member states, has secured the Trump administration’s assent to maintain a 10% baseline tariff on most European goods while exempting strategically sensitive sectors like aerospace, spirits and cosmetics.
Reports also suggest that EU negotiators are lining up specific concessions to protect Airbus and numerous German automakers. Under the emerging deal, it appears commercial aircraft and parts are likely to be spared additional duties.
Similarly, an “offsetting mechanism” is under discussion that would technically allow EU‑based automakers with US production facilities, such as BMW AG and Mercedes‑Benz Group, to export a limited number of vehicles tariff‑free. However, it looks unlikely that luxury brands that do not own or operate plants on American soil, including Ferrari and Porsche, would qualify for these relief measures.
The narrow window is bound to test the bloc’s unity, as divergent national priorities grapple for supremacy. Germany, for instance, is heavily reliant on the American market and is pushing for swift relief. Other member states, however, are toeing a stricter line on concessions.
Brussels has also pressed Washington to lift a 25% steel tariff, but American negotiators have resisted; so for now, steel exports remain outside the current carve‑outs. Should talks falter, the United States could raise default duties on EU goods to 20% — or, as President Trump once threatened, to 50%. Either scenario would deal a severe blow to export‑oriented economies like Germany and France.
With approximately €380 billion of trade exposed to higher duties, the European Union now has to strike a delicate balancing act as it faces some tough questions. Chief among them: should it focus on securing immediate certainty for its exporters, or look to safeguard long‑term industrial competitiveness while maintaining solidarity amongst member states?
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