 "After Trump’s 10% offer, European Union scrambles to escape punitive tariff")
The European Union is on the cusp of reaching a preliminary trade deal with the US that would set a 10 per cent tariff rate on the bloc beyond the now-extended deadline of August 1.
As most countries are yet to ink permanent trade agreements with the US, with many, including the EU and India, almost ready with their respective deals, President Donald Trump announced the postponement of the tariff pause deadline, moving it from July 9 to August 1.
The EU is pushing for an exemption from the 10 per cent tariff on certain key products, including aircraft, aircraft parts, and wine and spirits, according to sources familiar with the discussions. Some form of relief is expected to be included in the agreement in principle.
If the EU is not able to strike a deal with the US by August 1, it will be subjected to 50 per cent tariffs on all its products, dealing a huge blow to its economy.
While officials are working to chart out a permanent deal, the preliminary agreement will be in place for the short term and will not be legally binding.
How are the talks going?
According to an earlier Bloomberg report, the bloc has greenlit Trump’s tariffs but wants the US to provide tariff concessions on sectors like pharmaceuticals, alcohol, semiconductors and commercial aircraft.
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View AllThe EU is also pushing for quotas and exemptions to mitigate the impact of the US’s proposed 25 per cent tariff on cars and car parts, as well as the 50 per cent tariff on steel and aluminium, which Brussels contends would threaten thousands of European jobs.
What measures is the EU taking?
The EU has approved tariffs on €21 billion worth of US goods, ready to be imposed swiftly in response to Trump’s metal tariffs. The measures target politically sensitive American states, including products like soybeans from Louisiana, home to House Speaker Mike Johnson, along with agricultural goods, poultry, and motorcycles.
The bloc has also prepared a list of additional tariffs on €95 billion of American products in response to Trump’s reciprocal levies. These tariffs would be imposed on industrial goods, including Boeing Co. aircraft, US-made cars, and bourbon.
Stocks rise as Trump extends deadline
Stocks rose Tuesday as traders cautiously welcomed Donald Trump’s extension of his tariff deadline and indication he could push it back further, though uncertainty over US trade policy capped gains.
Investors tentatively welcomed the delay amid hopes officials will be able to reach deals with Washington, with some observers seeing the latest move by the president as a negotiation tactic.
While Wall Street’s three main indexes ended down – with the S&P 500 and Nasdaq back from record highs – Asian markets mostly rose.
Tokyo and Seoul advanced, while there were also gains in Hong Kong, Shanghai, Wellington, Manila, Jakarta, Mumbai and Singapore. London and Frankfurt all rose at the open, though Paris was flat.
With inputs from agencies
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