The EU is in its tariff endgame, reportedly close to a “framework” deal with the US to avert President Donald Trump’s threatened 50% tariffs, while simultaneously holding firm on its “red lines.” The bloc is willing to accept 10% blanket tariffs, but this is contingent on securing an extension for broader negotiations and potential concessions on the 25% car tariff. However, deep concerns remain regarding US demands on strategically important sectors, economic purchases, and non-trade barriers. The critical deadline is next Wednesday.

US Treasury Secretary Scott Bessent offered a cautiously optimistic assessment after his meeting with EU Trade Chief Maroš Šefčovič, hinting at the possibility of a deal. The intensity of negotiations will continue through Thursday afternoon with US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, with officials expecting “diligent” work through the weekend to bridge remaining gaps.

The pressure on the EU stems from Trump’s explicit threat to impose a crippling 50% tariff on all EU goods by July 9th. This would significantly escalate current tariff levels, which already include 10% on most goods and 25% on cars. German Chancellor Friedrich Merz has been a vocal proponent of a swift, “agreement in principle,” prioritizing the immediate removal of tariff burdens on businesses over prolonged, complex negotiations.

A key EU demand for any extended talks is a “standstill clause,” guaranteeing no new tariffs. While optimism exists for a deal by Friday, potentially providing Trump with a timely Independence Day announcement, the historical complexities of US-EU trade relations remain. Reports suggest a “massive tome” of US grievances was presented in earlier talks, and the latest US proposal reportedly lacks details on US concessions, particularly on the EU’s “red lines.”