The European Union is prepared to accept a 10% universal tariff on most of its exports to the United States as part of President Donald Trump’s new trade regime, according to a Bloomberg report citing people familiar with the matter.
However, the EU is pushing for key exemptions and sector-specific reductions — particularly for pharmaceuticals, alcohol, semiconductors, commercial aircraft, and autos — in an effort to protect its most valuable industries.
What the EU Wants:
- Lower tariffs for strategic sectors
- Quotas or carve-outs on US tariffs currently at 25–50% for autos, steel, and aluminum
- Assurances that the 10% “universal tariff” won’t escalate into broader protectionism
Pressure Before the July 9 Deadline
The negotiations come as the clock ticks down toward Trump’s July 9 “Liberation Day” deadline, when many temporary tariff pauses are set to expire. Without a finalized deal, the EU could face a return to harsh duties, especially on autos and metal exports.
The universal tariff proposal, originally floated in early June, would replace Trump’s patchwork of country- and product-specific duties with a simplified 10% rate — but EU officials argue that such a flat rate disproportionately harms high-value sectors critical to European economies.
Market Impact
- European automakers, like Volkswagen and BMW, could see tariff relief if carve-outs are accepted
- Airbus and semiconductor suppliers are watching closely for favorable terms
- Steel and aluminum producers face the toughest odds, as the US seeks to protect domestic production
Trade at a Crossroads
This willingness to compromise marks a notable shift in EU strategy, as Brussels signals it’s ready to make deals rather than risk a prolonged trade war with Washington.
Still, major sticking points remain — and any final deal will need approval from all 27 EU member states.
A deal would ease market fears and provide clarity for exporters, but if talks stall, both sides risk a sharp escalation in tariffs and broader economic fallout just as signs of global slowdown reemerge.
More updates to follow as trade talks continue.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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