EU and U.S. Upbeat on Trade Deal Ahead of July Deadline

TMTPOST -- The European Union and the United States seem upbeat on their trade agreement to avoid transatlantic trade war ahead U.S. President Donald Trump’s July 9 deadline, when the 90-day pause on higher reciprocal tariffs are set to return.

Credit：Xinhua News Agency

European Commission president Ursula von der Leyen was confident a deal could be struck before the deadline, the president told EU leaders at a closed-door meeting Thursday evening, Bloomberg reported, citing people familiar with the matter.it was said that there was a shift in tone among the leaders during discussion of a new proposal the U.S. shared this week. Many leaders said they were ready to accept some degree of imbalance in a trade deal to avoid an escalation, per the report.

U.S. Commerce Secretary Howard Lutnick also appeared confident in striking a deal with the EU to meet the deadline. The EU had picked up the pace of the negotiations in recent weeks, laying out the groundwork for an accord, Lutnick said in an interview late Thursday. “Europe has done an excellent job, they’re working hard,” Lutnick said. “I’m optimistic — I think we can get a deal now.”

Lutnick believed a deal with the EU to come at the end of the process is reasonable since the bloc is the largest trading partner for U.S., and the two sides have a deep and complex relationship.

European stocks rallied on Friday as the news raised hope for more U.S. deals with major trading partners. The pan-European STOXX 600 index finished up 1.1%, snapping the two-week losing streak with a weekly gain of 1.3%. The automobile and parts sector, highly sensitive to tariff-related headlines, popped 4.1%, steering sectoral advances.

The EU is weighing concession to woo Trump in bid to clinch a speedy trade deal, the Wall Street Journal cited sources on Thursday. The reported concessions include lowering tariffs on a range of U.S. imports, lowering nontariff barriers, more purchase of American products including liquefied natural gas (LNG), cooperation with the U.S. to handle its economic concerns about China.

Many European officials are resigned to the idea that the U.S. sticks to its 10% baseline tariffs and have focused on seeking exemptions as much as possible to mitigate the tariff shock, per the sources. Germany and Italy are reported to be leaders of a group of EU members that are pushing for a quick preliminary trade agreement between the bloc and the U.S. It was said that these countries argue the EU could first strike an agreement with just a few pages, and then update it in detailed follow-up negotiations.

The EU became divided during their discussion at a meeting Thursday evening, According to a Bloomberg report that day. It noted the sticking point for EU policymakers is whether to accept an asymmetrical trade deal with the US or risk escalation by striking back, triggering Trump’s retaliation. It was said that several member states stood against countermeasures, with most suggesting that reaching a quick deal with the US is better than holding out for a perfect one, even if many of U.S. tariffs remain in place. On their opposite, France rejected any deal skewed in favor of the U.S., and pushed for total rollback of tariffs.