The fate of a potential trade agreement between the European Union and the United States now lies largely in the hands of President Donald Trump, as European Commission President Ursula von der Leyen prepares for high-stakes negotiations this Sunday in Scotland.
With a Friday deadline looming, failure to reach a deal could trigger 30% tariffs on EU exports to the US, escalating trade tensions between the two economic powerhouses.
Last-Minute Negotiations Underway
According to BBC News, intensive discussions have been ongoing at both technical and political levels. A spokesperson for von der Leyen stated, “Leaders will now assess the progress and explore the possibility of a balanced agreement that ensures stability for businesses and consumers on both sides of the Atlantic.”
However, EU officials remain cautious, acknowledging that Trump’s unpredictable negotiating style could sway the final outcome. The US president recently demonstrated this in talks with Japan, where last-minute changes were made before a deal was finalized.
Proposed Tariff Structure and Key Exemptions
The draft agreement under discussion would impose a 15% tariff on most EU exports to the US, with limited exceptions for sectors such as:
Aviation
Medical devices and generic medicines
Certain spirits
Specialized manufacturing equipment
Steel and aluminum imports would face a 50% tariff if they exceed agreed quotas. Additionally, Trump has already imposed a 25% levy on cars and auto parts, along with a 50% tariff on copper.
As reported by Reuters, the EU is pushing for a 15% cap on future tariffs in sensitive industries like pharmaceuticals—a sticking point where Trump’s stance will be decisive.
Trump’s Take: “50-50 Chance” of a Deal
Speaking to reporters upon arriving in Scotland, Trump remarked, “We’ll see if we make a deal. Ursula [von der Leyen] is highly respected, and we look forward to the discussion.” He estimated only a *”50-50 chance”* of success, citing unresolved issues on “maybe 20 different things.”
Despite the uncertainty, Trump suggested the EU had a “pretty good chance” of securing an agreement. If successful, he called it “the biggest deal of them all.”
Potential Fallout: EU Prepares Retaliatory Measures
Should negotiations collapse, the EU is ready to impose counter-tariffs on $100 billion worth of US goods, targeting:
Boeing aircraft
American-made cars
Bourbon whiskey
Scrap metal exports
The bloc may also deploy its anti-coercion instrument, a powerful trade tool that could restrict US access to EU markets in services, public contracts, and other sectors.
Broader Implications: Trade, Security, and Immigration
Beyond tariffs, the deal could include provisions on:
Non-tariff trade barriers
Economic security cooperation
Strategic EU purchases in energy and AI chips
Trump also hinted at linking trade discussions to immigration concerns, stating, “You have to stop this horrible invasion happening in Europe—it’s killing many countries.”
What’s Next?
If an agreement is reached, it will likely take the form of a brief joint statement, paving the way for more detailed negotiations. However, with Trump’s history of last-minute demands, the outcome remains uncertain.
For the latest updates on this developing story, follow Financial Times.
