BRUSSELS/WASHINGTON — The European Union and the US are moving toward a trade deal that could include a 15 percent US baseline tariff on EU goods and possible exemptions, two European diplomats said on Wednesday, potentially moving President Donald Trump closer to another major trade agreement on the heels of the one he just unveiled with Japan.
European negotiators were hoping to reach an agreement to dodge the 30 percent tariff rate Trump has said he would impose on imports from the 27-nation bloc on August 1.
The rate, which could also extend to cars, would mirror the framework agreement the US has struck with Japan, which Trump announced late on Tuesday.
There could be concessions for sectors like aircraft and lumber as well as some medicines and agricultural products, which would not face tariffs, the diplomats said. Washington does not, however, appear willing to lower its current 50 percent tariff on steel, they said.
The White House did not immediately respond to a request for comment. Trump trade adviser Peter Navarro told Bloomberg News the report from the EU should be taken with “a grain of salt.”
As talks continued, the European Commission said it would press on with potential counter-measures in case a deal was not reached.
EU member states were set to vote on 93 billion euros of counter-tariffs on US goods on Thursday, European diplomats said. A broad majority of members support using anti-coercion instruments if there is no deal, they said.
Trump was aiming to secure an agreement on the heels of a complicated deal reached with Japan, the largest foreign investor in the US That deal included a $550 investment and loan pledges from Japan and its commitment to buy 100 Boeing airplanes and boost purchases of US agricultural products.
That investment – to be spent at Trump’s discretion – would focus on key industries like energy, semiconductors, critical minerals, pharmaceuticals and shipbuilding, the White House said on Wednesday.
Tariffs on Japan’s auto sector will drop from 27.5 percent to 15 percent as part of the agreement, reviving hopes for similar treatment for European cars.
Asian and European stock markets rallied as investors cheered the US-Japan agreement, but US stocks showed a more modest rise and earnings reports were gloomy.
American businesses making everything from chips to steel reported downbeat results on Wednesday, revealing how the Trump administration’s chaotic trade policy has hurt profits, added to costs, upended supply chains and weighed on consumer confidence.
US automakers signaled their unhappiness with the Japan deal, raising concerns about a trade regime that cuts tariffs on Japanese auto imports while leaving 25 percent tariffs on imports from their plants and suppliers in Canada and Mexico.
