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21h ago

EU Resigned to 10% Baseline Tariffs in U.S. Trade Talks as July Deadline Approaches

U.S. negotiators have ruled out lowering tariffs below 10%, using the revenue windfall to bolster their position ahead of potential escalation

European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium March 18, 2025. REUTERS/Yves Herman/File Photo
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Overview

  • U.S. Commerce Secretary Howard Lutnick has firmly rejected any reciprocal tariff rate below 10% for EU exports.
  • European officials with a $236 billion trade surplus at stake acknowledge that pressing for a lower rate has become increasingly difficult.
  • If negotiators fail to seal a deal by July 9, tariffs on most EU goods could rise from 10% to as much as 50%.
  • Current U.S. duties include a 50% levy on steel and aluminium and a 25% tariff on cars, while the EU has threatened up to $107 billion in counter-tariffs.
  • Talks have expanded to cover non-tariff issues such as digital services taxes, corporate sustainability reporting rules and food standards.