Top European and American officials are set for critical trade negotiations in Washington this week, facing a ticking clock to prevent a dramatic escalation in their ongoing economic dispute. EU Commissioner for Trade, Maroš Šefčovič, will meet with U.S. Commerce Secretary Howard Latnik and Trade Representative Jamison Greer in a last-ditch effort to secure a new trade agreement before a July 9 deadline imposed by President Donald Trump.
The stakes could not be higher. If no deal is reached, the Trump administration has threatened to levy crippling 50% tariffs on nearly all European exports to the United States. This would be a massive blow to an already strained trade relationship, where many EU goods already face a 10% U.S. tariff, with cars and auto parts at 25%, and steel and aluminum at a steep 50%. Brussels views these existing tariffs as unjustified and mutually harmful but has signaled a pragmatic approach to avert a full-blown trade war.
While publicly stating a desire to work in concert with their American partners, Šefčovič arrives in Washington with a mandate for tougher negotiations. The EU’s primary goal is the immediate cancellation of current tariffs and the prevention of any further increases. However, reports suggest Brussels may be willing to accept a universal 10% tariff on many goods, provided the U.S. offers significant concessions for key European industries such as pharmaceuticals, alcohol, semiconductors, and passenger aircraft. A reduction in the punishing tariffs on autos and metals remains a central demand.
European officials are bracing for four possible outcomes from the high-stakes talks: a balanced agreement acceptable to both sides; an imbalanced U.S. offer that Brussels would be forced to reject; a mutual agreement to extend the deadline and continue negotiations; or a complete breakdown where President Trump follows through on his threat. In the event of the latter, the EU has prepared a robust package of retaliatory measures designed to inflict maximum political and economic pain on the United States.
The EU’s counter-strike list is strategically targeted at products from key Republican states. It includes tariffs on soybeans, heavily grown in Louisiana, the home state of House Speaker Michael Johnson. The plan could impact up to $13.5 billion in U.S. goods, including beef from Kansas and Nebraska, cigarettes from Florida, and timber products from several southern states. Furthermore, Brussels has not ruled out sanctions against America’s dominant tech sector, which enjoys a significant trade surplus with the EU.
This aggressive posture masks deep divisions within the European Union itself. German Chancellor Friedrich Merz has advocated for a quick and simple deal, warning that a prolonged conflict could cost Germany 90,000 jobs. Conversely, French President Emmanuel Macron has cautioned against accepting an unequal agreement, arguing it would undermine Europe’s long-term global competitiveness. This internal friction adds another layer of complexity for negotiators trying to present a united front.
Ultimately, uncertainty reigns as the EU still views the U.S. as an indispensable partner but rejects negotiating under duress. As one expert noted, while the U.S. has proposed a mutual 10% tariff, the EU’s ideal scenario is a reduction to nearly zero. In the background, Brussels is exploring a strategic alternative: forging a powerful trade alliance with the 12-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Such a bloc could reshape global trade rules and governance, potentially leaving Washington on the outside looking in.