EU Races to Secure Trade Agreement with U.S.
(MENAFN) The European Union is accelerating efforts to secure a trade agreement with the United States ahead of the critical July 9 deadline, aiming to prevent a new wave of escalating tariffs.
Olof Gill, spokesperson for the European Commission, confirmed on Monday that ongoing "political and technical contacts" between Brussels and Washington remain active, with the EU committed to finalizing an agreement in principle by Wednesday.
Though time constraints have dashed hopes for a broad, comprehensive trade deal, the EU is determined to establish a framework that stops further tariff hikes. Without a deal, U.S. tariffs on the majority of EU imports could jump from the current 10 percent to 20 percent—and possibly soar to 50 percent—reflecting the rates announced by U.S. President Donald Trump on April 2.
Last Friday, the European Commission consulted with member states to evaluate the situation. Over the weekend, high-level talks continued, including a phone call between Commission President Ursula von der Leyen and President Trump on Sunday. While no official breakthrough emerged, the discussion was described as a "good exchange."
On Sunday, U.S. Treasury Secretary Scott Bessent revealed that tariffs on countries without agreements would take effect on August 1 rather than July 9. President Trump announced the U.S. would begin sending tariff notification letters to a dozen countries starting Monday at 12 p.m. Eastern Time (1600 GMT).
The European Commission is reviewing its next moves carefully. A list of potential retaliatory tariffs has been drafted and discussed with member states and industry representatives. However, according to Gill, "diplomatic efforts remain the priority," and there are no immediate plans to implement retaliatory measures.
Key EU players Germany, France, and Italy are deeply involved in the negotiations. German Chancellor Friedrich Merz highlighted the urgency of striking a deal to safeguard industries vulnerable to tariffs, particularly the automotive and pharmaceutical sectors.
As the July 9 deadline looms, experts remain doubtful about the possibility of reaching multiple robust agreements within such a narrow timeframe.
"Trade deals typically take years to negotiate. It would be surprising to see long-term deals materialize so quickly," said Andrew Lapping, chief investment officer at Ranmore Fund Management.
"Trump is in a teasing mood, hinting at more deals while keeping markets guessing. Investors are bracing for fresh volatility," said Susannah Streeter, head of Money and Markets at Hargreaves Lansdown, a British financial services company.
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