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U.S. and EU Close In on 15% Tariff Pact to Avert Trade War

Brussels is prepared to impose 30% retaliatory tariffs on roughly €100 billion of U.S. goods if negotiators fail to finalize the framework by August 1.

President Donald Trump speaks during a reception for Republican members of Congress in the East Room of the White House, Tuesday, July 22, 2025, in Washington. (AP Photo/Julia Demaree Nikhinson)
U.S. automaker General Motors' Cadillac vehicles are lined up at a vehicle storage yard at an industrial port near Tokyo on Wednesday.
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Overview

  • EU and U.S. negotiators are nearing agreement on a reciprocal 15% U.S. tariff on European imports, adopting the same baseline as the recently signed Japan deal.
  • The emerging framework would carve out exemptions for products including aircraft, medical devices and spirits, lowering or waiving duties on those sectors.
  • Brussels has merged two counter-tariff lists into a single package targeting around €93 billion of U.S. goods at 30% duties should the pact collapse.
  • Member states plan to vote this week on both the consolidated tariff package and activation of the bloc’s Anti-Coercion Instrument to strengthen deterrence.
  • Talks have accelerated following President Trump’s Japan agreement, which included a $550 billion investment pledge, prompting EU officials to explore similar financing arrangements.