UPDATE: President Donald Trump has just announced a 50-50 chance for reaching a trade deal with the European Union as critical negotiations unfold ahead of the August 1 deadline. Speaking to reporters on July 25 before departing for a golf trip in Scotland, Trump expressed cautious optimism, noting, “We have a 50-50 chance, maybe less than that.”
This urgent update comes as EU diplomats have recently shown optimism that a trade agreement could be within reach. Trump highlighted that U.S. and EU negotiators are working “closely” together, increasing hopes for a resolution. “I think the EU has got a pretty good chance of making a deal,” he added.
Earlier this month, Trump warned that if an agreement is not reached by August 1, the EU would face a staggering 30% tariff on most goods, alongside sector-specific tariffs. Already, he has imposed a 25% customs tax on cars and auto parts, and a double rate on steel and aluminum imports. Additionally, Trump signaled potential new duties on pharmaceuticals and semiconductors as early as next month, including a recent announcement of a 50% duty on copper.
European negotiators are pushing for a deal that would set a 15% baseline tariff for most exports, hoping this would also apply to automobiles facing industry-specific duties. They are also advocating for lower tariffs on certain steel and aluminum products, with potential exemptions for aviation, medical devices, and other sectors.
Trump indicated that he intends to issue around 200 additional letters to set tariff levels for other trading partners soon, suggesting that most rates are essentially settled. He downplayed the possibility of the UK trading its digital services tax elimination for reductions in steel and aluminum tariffs, stating, “If I do it for one, I have to do it for all.”
In his comments, Trump expressed skepticism about reaching a new deal with Canada, stating, “We haven’t really had a lot of luck with Canada.” He hinted at a potential increase in the tariff on Canadian goods from 25% to 35%, though aides noted this would not apply to imports covered under the U.S.-Mexico-Canada Agreement (USMCA).
On trade discussions with China, Trump remains optimistic ahead of upcoming talks in Stockholm, claiming that they are within the “confines of a deal.” He also praised Australia following their recent decision to remove import restrictions on U.S. beef, calling it a significant step in advancing trade relations. “Australia was great. They opened up beef yesterday for the first time ever,” Trump remarked.
As the clock ticks toward the August 1 deadline, all eyes are on the negotiations. The outcome could significantly impact international trade dynamics and tariffs on key imports. Stay tuned for the latest developments as this story evolves.