EU Trade Deal Hangs in Balance as US Tariff Threat Looms

EU Lawmakers Struggle to Finalize Deal with US

European lawmakers and governments are making good progress in negotiations to finalize a deal scrapping duties on US imports, but there is still some way to go, according to the European Parliament's chief negotiator, Bernd Lange.

The lawmakers and governments were aiming to finalize a deal under renewed pressure from U.S. President Donald Trump, with divisions over safeguards hanging over the chances of a swift agreement. Trump had said on Friday that he would increase tariffs on EU cars and trucks to 25% this week, from 15% currently, because the EU was not complying with the terms of a deal struck in Scotland last July.

The negotiators will meet again on May 19 for the next round of talks. Many EU countries want to ward off that threat and are pushing for swift implementation of legislation to remove import duties on U.S. industrial goods and grant preferential access to U.S. farm and sea produce, as set out in the trade accord.

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However, nine months after the deal was struck, the European Parliament and the Council, the body representing EU governments, still have to agree on a common text before the duty reductions can enter force. Lange had said earlier in May that Trump's behavior was unacceptable, after the U.S. president's surprise move to increase tariffs.

EU Lawmakers Want Tougher Safeguards

EU lawmakers want tougher safeguards, including suspending the deal if the U.S. fails to comply, making tariff cuts conditional on U.S. action, and ending EU tariff concessions entirely on March 31, 2028. EU governments had little appetite for inserting such items, one EU diplomat said. Another said the two sides were still far apart, with further talks likely to be required next month.

The car tariff threat cast a shadow over a meeting of G7 trade ministers in Paris on Wednesday. German Economy Minister Katherina Reiche, whose country would be among those hardest hit by the car tariff increase, said she was in intense talks with U.S. officials and was hopeful they would "solve this challenge". EU Trade Commissioner Maros Sefcovic said he would be heading to Brussels to attend the negotiations later in the day.

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