EU Waits as Washington Delays Trade Deal Decision
The European Union remains in uncertainty as the long-anticipated trade agreement with the United States continues to hang in the balance. Despite earlier expectations of a finalized framework by July 9—when a temporary exemption from President Donald Trump’s tariff policies was set to expire—no deal has been reached yet.
President Trump, however, hinted that progress is still possible within days. Speaking Tuesday at the White House, he stated:
"We're probably two days off from sending them a letter. We are talking to them."
This remark came after Trump confirmed on social media that 14 nations had received formal notices of updated tariff rates. The EU, notably, has yet to receive such correspondence.
During a Cabinet meeting on Wednesday, Trump expressed a notable shift in tone, acknowledging improved dialogue with European officials:
"They treated us very badly until recently, now they're treating us very nicely. It's like a different world," he said. "They were among the toughest to deal with."
This represents a departure from Trump's previous criticism of the U.S.-EU trade dynamic, which he has frequently called unfair.
Trade Stakes: Billions on the Line
According to data from the European Council, total trade between the EU and U.S. reached approximately €1.68 trillion ($1.97 trillion) in 2024, covering both goods and services. While the EU enjoyed a surplus in goods trade, it ran a deficit in services, resulting in a net surplus of around €50 billion.
U.S. Commerce Secretary Howard Lutnick echoed optimism, telling CNBC’s Power Lunch on Tuesday that a deal is near:
"The EU has made meaningful offers to open up its markets to American farmers, ranchers, and fishermen.""The president’s got those deals on his desk and he's considering how to proceed."
Tariffs in Focus
Current expectations suggest that the EU may agree to a baseline 10% tariff, significantly lower than the 50% tariffs Trump previously advocated. This compromise would allow for sector-specific negotiations and potential exemptions.
EU Commission President Ursula von der Leyen responded cautiously to Trump’s comments, stating on Wednesday:
"We stick to our principles, we defend our interests, we continue to work in good faith, and we get ready for all scenarios."
Speaking with Squawk Box Europe, Peter Chase, a senior fellow at the German Marshall Fund, highlighted the broader implications:
“The importer pays the tariff, not the exporter. If Europe has a 10% tariff and Korea has 25%, the American buyer pays more for Korean goods than European ones. So, ultimately, it's the U.S. customer who bears the cost.”
What’s Next?
As negotiations continue, both sides appear cautiously optimistic. Whether the EU and U.S. can strike a timely and mutually beneficial deal remains to be seen. But with tariffs and billions in transatlantic trade on the line, the pressure to finalize an agreement has never been greater.
