US officials are ‘optimistic’ that an agreement could be imminent.
German Chancellor Friedrich Merz has said that negotiations between the European Union and the United States over a long-running trade dispute are making progress.
Speaking in Berlin on Wednesday ahead of a dinner with French President Emmanuel Macron, Merz said, “We have been hearing in the last few minutes that there could possibly be decisions,” referring to ongoing talks aimed at avoiding steep tariffs on European goods.
The United States has threatened to impose a 30 percent tariff on EU exports if no agreement is reached by August 1.
But hopes for a breakthrough rose this week after reports that both sides are close to a deal that would set a 15 percent tariff rate on EU goods – a compromise similar to a recent agreement between the US and Japan.
Macron said that European leaders and the European Commission had been in “constant contact” to coordinate their response to the US pressure.
He added: “We want the lowest possible tariffs, but also to be respected as the partners that we are.”
US Secretary of the Treasury Scott Bessent echoed the optimism, telling Bloomberg Television that the talks were “going better than they had been”, and that progress was being made.
Further discussions between EU Commissioner for Trade Maros Sefcovic and US Commerce Secretary Howard Lutnick also took place on Wednesday, while officials from the European Commission briefed EU member states following the latest round of discussions.
Diplomats say the recent deal between Washington and Tokyo has increased pressure on Brussels to accept a compromise, even if reluctantly.
“The Japan agreement made clear the terms of the shakedown,” an EU diplomat told the Financial Times. “Most member states are holding their noses and could take this deal.”
If finalised, the EU-US deal could include some exemptions, such as for aircraft, medical devices and alcoholic beverages, according to the newspaper.
However, the European Commission, which leads trade policy for the EU, has already prepared a plan to hit back with more than $100bn in tariffs if talks collapse.
It comes as EU exporters have already been facing a 10 percent tariff on goods sent to the US since April, on top of pre-existing levies.
