President Trump said on Friday there is a “50/50 chance, maybe less than that” of his administration striking a trade deal with the European Union ahead of a looming deadline next week.
Mr. Trump, who made the comments before he left for a four-day visit to Scotland, comes ahead of the White House’s Aug. 1 deadline for striking trade agreements with the the EU and other nations. If the US and EU fail to reach a deal, the president has threatened to impose a 30% tariff on imports from the trading bloc’s 27 member countries.
Dozens of other nations also face higher tariff rates starting Aug. 1, except for those that have already done a deal before the deadline.
The U.S. has recently announced the outlines of trade deals with Japan, China, Indonesia, the Philippines and U.K., though with many details still remaining to be finalized.
European officials suggested this week that they could be open to a 15% U.S. baseline tariff rate, while signaling that the EU is prepared to hit American exports with levies on more than $100 billion worth of U.S. goods starting Aug. 7 if the two sides fail to strike a deal.
Trade experts say a U.S.-EU agreement could mirror the Trump administration’s pact this week with Japan, which imposes a 15% tariff on Japanese imports. In return, Japan has committed to invest $550 billion in the U.S. and further open its domestic market to U.S. exports, including for cars and certain farm products.
Financial markets have remained sanguine this week about the threat of tariffs despite the White House’s approaching deadline for trade deals, with leading U.S. indexes up modestly on Friday.
“Reports this week suggest that the EU and U.S. are on the brink of agreeing a trade deal with a 15% baseline tariff on U.S. imports,” Jack Allen-Reynolds, deputy chief eurozone economist with Capital Economics, told investors in a research note. “It’s hard to spin it as a good deal, but it would at least avoid much higher U.S. tariffs and retaliation from the EU. As a result, markets have reacted positively.”
contributed to this report.
