EU trade officials say US trade agreement will miss the deadline

Trade officials in Brussels no longer believe negotiations with the United States will be done by Trump’s July 9 deadline, even though both sides have picked up the pace in the past week.

According to Bloomberg, the European Union sees the most likely outcome as reaching just a basic agreement on general principles by the deadline — not a finished deal. That would leave a lot of important details still unresolved, and the White House hasn’t even responded yet to the EU’s latest proposal.

Talks have turned urgent because Washington plans to hit almost all EU exports with a 50% tariff if there’s no agreement by the deadline. That covers around €380 billion, or about $434 billion, in trade — roughly 70% of European exports to the US.

Trump’s move is designed to increase pressure. But on the EU side, officials are already getting ready for retaliation if the deal falls through.

Sefcovic pushes negotiations while prepping EU countermeasures

Maros Sefcovic, the EU’s trade chief, has been in constant contact with Howard Lutnick, the US Commerce Secretary, and Jamieson Greer, the US Trade Representative.

They’ve been speaking regularly on the phone and even held an in-person meeting recently to speed things up. These conversations started after both sides agreed two weeks ago to fast-track the process. Despite this, there’s been no official reply yet from the US on the EU’s latest suggestions, and time is almost up.

The European Commission gave an update to member states earlier this week. Right now, both sides are locked in detailed talks on specific sectors including steel, aluminum, civilian aircraft, automobiles, pharmaceuticals, and semiconductors.

They’re also talking about problems with tariff and non-tariff barriers. But officials involved say it’s still tough. The EU thinks the US is pushing for terms that mostly benefit Washington and don’t offer much back.

Because of that, Brussels is getting its backup plans ready. Officials are reviewing potential countermeasures in case talks collapse completely. These would include more than just tariffs.

The commission is asking member countries to help find strategic areas where the US depends on the EU — areas that could be used to apply pressure. The EU is trying to make it clear that if Trump triggers a tariff war, they’ll respond immediately.

The bloc already approved tariffs on €21 billion worth of American goods, mostly targeting politically sensitive states. That includes soybeans from Louisiana, where House Speaker Mike Johnson is based. It also covers US poultry, motorcycles, and other agricultural products.

A second round is also ready — it would slap tariffs on €95 billion worth of US exports, including Boeing aircraft, US-made cars, and bourbon. That second list is directly tied to Trump’s new “reciprocal” tariffs and auto duties.

Lagarde warns against more economic damage as EU draws red lines

The EU is still trying to address some of Washington’s complaints, especially about non-tariff barriers. Officials say they’re simplifying rules internally, but they won’t agree to anything that touches the bloc’s autonomy over tax or regulation. Those areas are “red lines,” and the commission won’t cross them under any pressure, even with the July 9 threat looming.

While the EU keeps trying to talk, they’re also preparing for failure. Separate from these talks, the bloc is having bilateral discussions with the US on critical minerals. That issue may also show up at the Group of Seven summit in Canada later this month, though it’s not clear if anything concrete will come out of it.

On Wednesday, Christine Lagarde, President of the European Central Bank, said the world is heading toward bigger economic problems if countries keep using trade as a weapon. Speaking in Beijing, Lagarde said: “We have witnessed a sharp rise in the use of industrial policies aimed at boosting domestic capacity. Since 2014, subsidy-related interventions that distort global trade have more than tripled globally.”

Lagarde added that China isn’t alone — governments in emerging markets and advanced economies are all doing the same thing. She pointed out that America’s share of global demand has jumped in recent years, driven partly by high public sector spending. “Coercive trade policies fail to resolve financial imbalances,” she said. “They just bring economic damage.”

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