EU moves closer to US trade agreement with 15% tariff plan

After months of tense back-and-forth tariff threats, the European Union and the United States finally appear to be moving toward common ground. At the centre of this potential agreement is a 15% tariff that would apply to most imported goods — a move both sides hope will calm rising trade pressures and avoid a costly tariff battle.

A breakthrough could be near, with both sides working on a deal that would implement a 15% tariff on most traded goods — a move aimed at cooling down the tariff standoff.

According to diplomats, EU member countries may agree to a 15% import duty on a wide range of goods, including vehicles. However, for products like steel and aluminium that go beyond a certain import quota, the tariff could go up to 50%, one diplomat said.

Even though EU officials are optimistic, they know that the final decision depends on US President Donald Trump, as per news agency Reuters. A US official also said the talks are still ongoing and there may not be an immediate announcement.

FEARS OF TRADE WAR STILL LOOM

The two sides have been working hard to make progress and avoid a major trade battle. But tensions rose again two weeks ago when Trump warned he might impose a 30% tariff on most EU goods if a deal isn’t made by August 1.

Trump has already placed a 25% duty on car imports and doubled that for steel and aluminium. He’s also hinted that more products, including medicines, semiconductors, and copper, could be targeted next.

If there’s no agreement by the deadline and Trump increases tariffs to 30%, the EU is preparing its own response.

EU PLANS COUNTER TARIFFS

If the US goes ahead with harsher tariffs, the EU is ready to hit back in a tit-for-tat move. It’s preparing tariffs on over 90 billion (around $106 billion) worth of American goods - including well-known Boeing aircraft, cars, and bourbon whisky.

The EU is also considering using a special tool called the Anti-Coercion Instrument (ACI). This would allow the bloc to take a wide range of actions, such as:

Despite the warnings, EU and US leaders still hope to reach an agreement. European officials say their main goal is to avoid escalation and find common ground before the August deadline.

"We are hearing at this very moment that decisions may be forthcoming," said German Chancellor Friedrich Merz. Speaking before a meeting with French President Emmanuel Macron, he added, "We are meeting at a time that could not have been better."

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With inputs from Reuters