EU US Trade Talks Stall With 20% Tariff Threat Looming

Negotiators from the European Union and the United States have failed to reach a significant breakthrough in their ongoing trade talks, according to an EU diplomat. The negotiations, which have been ongoing for some time, have not yielded the desired results, leaving both sides in a state of uncertainty. The EU is reportedly negotiating to keep some sectors free of tariffs and accepting 10% duties on other goods. The commission has until Wednesday next week to strike an agreement or see US President Donald Trump's sweeping tariffs snap back. If no deal is reached, the default tariff on EU imports is expected to double to 20% or even higher.

The EU is preparing for the possibility that no satisfactory agreement is reached, and has consulted on a rebalancing list, and will defend the European interest as needed. In other words, all the interim instruments are on the table. The EU has prepared counter-tariffs on US goods worth around €100 billion if talks yield no positive outcome. The EU chief also made it clear that Brussels would not hold back from taking countermeasures to protect the European economy if talks fell short.

The EU and the US are moving toward an agreement that would take the form of a headline “political understanding” to resolve their tariffs dispute before a July deadline. The EU negotiates with the US to lift the tariffs imposed by the Trump administration, including the 25% tariff on car imports. The EU is pushing back against the US and its criticism of the bloc's tech rules. The EU is willing to accept 10% tariffs, but talks may go down to the wire before the Wednesday deadline.

The EU is ready for a trade deal with the United States, but warned that Brussels is ready to retaliate with a list of countermeasures if "no satisfactory agreement is reached". The EU is aiming at the 9th of July, and the size of trade between the two transatlantic allies meant an agreement in detail was "impossible" to conclude in the 90-day window ending next week. The EU chief also made it clear that Brussels would not hold back from taking countermeasures to protect the European economy if talks fell short. The EU has prepared counter-tariffs on US goods worth around €100 billion if talks yield no positive outcome. The EU is willing to accept 10% tariffs, but talks may go down to the wire before the Wednesday deadline.

In summary, the EU and US trade talks have not resulted in a significant breakthrough, with both sides preparing for potential escalations in tariffs. The EU is willing to accept certain tariffs but is also prepared to retaliate with countermeasures if necessary. The negotiations are expected to continue until the deadline, with both sides aiming for a political understanding to resolve the dispute.

Analysis: The failure to reach a breakthrough in trade talks between the EU and the US highlights the ongoing tensions between the two economic powers. The EU's willingness to accept certain tariffs while preparing countermeasures indicates a strategic approach to protect its economic interests. The negotiations are crucial as they involve significant trade volumes and could have broader implications for global trade dynamics. The outcome of these talks will be closely watched by international observers and could set a precedent for future trade negotiations between major economies.