Flags of the EU and the United States flutter next to the Ukrainian military hub in southeastern Poland on March 6, 2025.
Sergei is because | AFP | Getty Images
Three sources told CNBC that the clock is ticking in trade talks between Washington and the EU, and European officials now say their biggest hope is to reach a “political” deal by a key July 9 deadline.
The specific details of such trade arrangements must be made later.
“Last week’s U.S. proposal was in principle against an agreement,” an EU official told CNBC. An EU official who did not want to be named for the sensitivity of the talks, adding that in principle, this agreement would “be in place appropriate trade agreements at a later stage.”
Since the beginning of the second term of U.S. President Donald Trump, the United States and the European Union have had a difficult relationship among trade and support for the embattled Ukraine. Tensions escalated in early April when the White House announced reciprocity tariffs on most global trading partners, including a 20% tax on the EU. All these responsibilities have been temporarily reduced to July 9 to facilitate talks.
The United States sent a new proposal to the EU’s negotiating team last week. European negotiators have face-to-face negotiations with their U.S. counterparts later this week in a bid to reach an agreement in the coming days. Bilateral trade between the EU and the United States accounts for 851 billion euros ($1 trillion) in 2023, according to the European Commission.
European officials expect new updates to talks on Friday, but things are smooth. On Monday, the European ambassador held a dialogue on the status of trade negotiations. Lithuanian Finance Minister Rimantas šadžius told CNBC on Wednesday that he was “a bit optimistic” that there would be trade compromises between the two sides of the Atlantic.
despite this,,,,, Sources told CNBC that despite efforts to reach a trade compromise, the EU is preparing for any possible outcome, including the return of reciprocal tariffs.
The same EU official told CNBC: “The general meaning is that in the coming days and weeks, all outcomes range from successful transactions of a successful framework agreement to higher U.S. tariffs with other sectors.”
European Commission President Ursula Von der Leyen also shared this view last Friday.
“We are ready to reach an agreement. At the same time, we are preparing for the possibility of not reaching a satisfactory agreement,” she said in a press conference.
The European Commission did not immediately comment when CNBC contacted CNBC on Wednesday regarding updates to the talks.
Another EU official also spoke with CNBC on anonymity, saying Brussels had a realization that it was nearly impossible for the EU and us to return to the trade relations before the mutual tariffs were announced on April 2.
A third EU official who also chose to speak anonymously told CNBC there is a risk that the outcome of the talks will be a “asymmetric” deal and that the EU will not escape some additional U.S. taxation.
Still, the group is seeking to gain concessions in key areas of its economy, including automobiles, semiconductors and pharmaceuticals.
The first EU official added that some member states only agree to one agreement in principle if the Trump administration promises “pre-tariff relief.”
The European Commission is the executive branch of the EU, conducting trade negotiations with the rest of the world, but its proposals and positions reflect the ideas of the 27-capital capital.
