The European Union and United States are negotiating a trade agreement that would impose 15% tariffs on imports, similar to the deal struck with Japan this week.
According to a report in the Financial Times, diplomats familiar with the situation said the EU could agree to the reciprocal tariffs to avoid US President Donald Trump’s threat to hike them to 30% on 1 August.
Both sides would zero rate tariffs on some products such as aircraft, spirits and medical devices.
“Most member states are holding their noses and could take this deal,” one source told the publication.
The European Commission briefed envoys from member states on Wednesday after talks with the US.
The US has been charging an extra 10% tariff in addition to its pre-existing duties averaging 4.8% on EU exports since April.
It was understood that the 15% minimum tariff would include these existing duties. For example, tariffs on cars, which are 27.5%, would drop to 15%.
German Chancellor Friedrich Merz said he had heard that a deal to end the trade dispute between the US and the EU would be agreed imminently.
“We are hearing this very minute that there could be a decision,” Merz said while welcoming French President Emmanuel Macron in Berlin.
However, if Trump chooses to impose a 30% tariff, the EU could retaliate by activating its never-before-used anti-coercion instrument (ACI), which would give it leeway to block US companies from public tenders, revoke intellectual property protection and restrict imports and exports.
