Trump’s tariffs deadline is looming for Europe. Here’s where things stand

All eyes are on talks between the U.S. and the European Union, which have yet to strike a trade deal with just days to go before Washington’s tariffs come into full effect.

Should the trading partners fail to reach an agreement by July 9 — when a 90-day reprieve on U.S. President Donald Trump’s so-called reciprocal tariffs ends — EU goods imported to the U.S. could be hit by duties of up to 50%. Retaliatory measures from the EU targeting a wide range of U.S. goods, which have also been temporarily put on hold, could then follow shortly afterward.

The U.S.-EU trade relationship is one of the most important in the world, accounting for around 30% of global goods trading according to the European Council. Medicinal and pharma products, road vehicles and petroleum products are some of the top traded goods.

In 2024, trade between the two transatlantic partners was valued at around 1.68 trillion euros ($1.98 trillion) when taking into account both goods and services, the European Council said.

The EU recorded a surplus of 198 billion euros, when it comes to goods, but logged a deficit of around 148 billion euro in the trading of services — meaning the bloc overall had a trade surplus of around 50 billion euros in 2024.

Trump has repeatedly taken issue with the trade relationship between Washington and Brussels, suggesting it is unfair and accusing the EU of taking advantage of the U.S.

U.S.-EU negotiations have appeared to be difficult and slow to gain ground. Sources told CNBC earlier this week that a bare-bones political deal that is light on details may be the EU’s best hope.

European Commission President Ursula von der Leyen seemed to echo the view on Thursday.

“What we are aiming at is an agreement in principle,” she said, adding that a detailed agreement was “impossible” to reach during the 90-day reprieve.

Von der Leyen also reiterated that, if no agreement is reached, “all the instruments are on the table.”

European Trade Commissioner Maros Sefcovic meanwhile said in a social media post on Friday said that he had had a “productive” week in Washington D.C. meeting various U.S. officials.

“The work continues. Our goal remains unchanged: a good and ambitious transatlantic trade deal,” he said.

U.S. Treasury Secretary Scott Bessent seemed more hesitant about the odds of a trade agreement being struck before the deadline.

“We’ll see what we can do with the European Union,” he told CNBC’s “Squawk on the Street” on Thursday.

“The detailed agreement is what it says: detailed. It can run into many pages, [because] full trade agreements are thousands of pages, but what we could see is heads of terms like the one that the U.S. signed with the U.K.,” he said.

“So that’s possible, but I don’t think the actual content will be similar,” Gardner added.

Carsten Nickel, managing director at Teneo, went a step further by saying a broad agreement was the “best outcome” the EU could achieve.

The initial deal should aim to win time for further talks and include the EU’s acceptance of a 10% baseline tariff from the U.S., he told CNBC by phone, explaining that this could then allow for further conversations about items such as sectoral exemptions.

Uncertainty will nevertheless remain, even if such an arrangement is brokered, Nickel suggested.

“We’ll be in a world where, whatever agreement has been struck by then will remain the subject of intense bargaining and will remain at risk of the U.S. changing its mind, losing patience, looking in other directions and so on,” Nickel said.

He does not see the bloc imposing retaliatory measures unless Trump slaps full tariffs next week.

“And even then, I think the EU will tread carefully,” Nickel concluded.