EU, US eye tariffs ahead of Trump–von der Leyen meeting in Scotland

Trade negotiators from the European Union and the United States are engaged in intense discussions ahead of a high-stakes meeting between US President Donald Trump and European Commission President Ursula von der Leyen in Scotland on July 27. Brussels is striving to secure a trade deal with Washington to prevent a damaging transatlantic tariff war.

Von der Leyen, who arrived in Glasgow on the evening of July 26, is set to meet Trump in the afternoon with hopes of finalising a pact that would avoid 30 per cent US tariffs on European goods and possible retaliatory measures from the EU. Negotiators are reportedly close to an agreement that would set tariffs at around 15 per cent on most US imports from the EU, reflecting a recent deal the US reached with Japan, Caliber.Az reports via Financial Times. 

However, talks between US Commerce Secretary Howard Lutnick and senior EU officials continued late into the night of July 26, with sources briefing the Financial Times describing the discussions as "combative at times." The main points of contention remain the exact tariff levels on EU steel, automotive, and pharmaceutical products.

Lutnick and US Trade Representative Jamieson Greer stayed in Washington but are expected to arrive on the morning of July 27 at Trump’s luxury Turnberry golf resort on Scotland’s south-west coast to finalise the agreement.

Trump has warned that if no deal is reached by August 1, he will impose 30 per cent tariffs on all EU exports to the US. This would add to the existing 25 per cent tariffs on cars and car parts, and 50 percent levies on steel and aluminum already in place. The US president has also launched investigations that could lead to tariffs on chips, pharmaceuticals, and aerospace parts.

Meanwhile, a growing number of EU member states are urging Brussels to activate retaliatory tariffs on nearly €100 billion worth of US goods if the talks fail.

The EU and US, whose trade relationship totaled €1.6 trillion in 2023, have been negotiating this potential deal for almost four months. During this period, the US has applied an additional 10 percent tariff on EU products, alongside the existing 25 percent and 50 percent tariffs on cars and steel/aluminum respectively.

Trump has frequently targeted the EU with sharp rhetoric, accusing the bloc of "ripping off" America.

On July 25, upon arriving in Scotland, where he is also playing golf and meeting UK officials, Trump said there were about 20 “sticking points” still unresolved in negotiations with the EU. He added that the bloc “want[s] to make a deal very badly.”

EU ambassadors from member states are scheduled to meet on Sunday morning for an update on the talks. They will also need to approve any deal agreed upon by Trump and von der Leyen, EU officials confirmed.

If a deal is reached, Brussels will suspend tariffs of up to 30 percent on €93 billion worth of US imports starting August 7.

If no agreement materialises, some member states are pushing the European Commission to seek approval to activate the bloc’s anti-coercion instrument early next week—a powerful, never-before-used trade measure. The first step would require Brussels to determine that coercion has taken place. Then, a weighted majority of member states could approve a broad range of retaliatory actions.

Officials indicated these measures could include charges on digital advertising sales targeting tech companies and excluding US firms from public tenders.

By Sabina Mammadli