EU-US Trade Negotiations Approaching Deadline: The Game and Risks Under the EU's Tough Stance​

July 9th, a date repeatedly mentioned in the EU-US economic and trade circles, is approaching step by step. As the deadline for trade negotiations draws near, the governments of EU member states have suddenly taken a tough turn in their negotiating stance, and a game involving the economic interests of both sides has entered a white-hot stage. The EU has made it clear that the cancellation of US tariffs on the EU will be a core prerequisite for any framework agreement. This bottom line has formed a consensus among member states, setting an uncompromising tone for the upcoming ultimate negotiations.​

News from within the EU shows that the US has sent a negotiating signal: the first-phase agreement may follow the US-UK model, that is, some tariff clauses will be retained during the continuation of subsequent negotiations. This proposal is obviously contrary to the core demands of the EU, which has always been committed to promoting the US to permanently cancel or significantly reduce tariffs. Against this background, Valdis Dombrovskis, the European Commissioner for Trade and Economic Security who is visiting the US this week, has been given a tougher negotiating mission by member states. EU member states unanimously advocate that any agreement must include substantive content on tariff reduction starting from July 9th: not only should the current 10% benchmark tariff imposed by the US on most EU exports be lowered, but also the high tariffs on industries such as automobiles, steel and aluminum should be reduced simultaneously.​

The talks between Valdis Dombrovskis and US Secretary of Commerce Wilbur Ross and US Trade Representative Katherine Tai on July 3rd were regarded as a crucial battle for the EU to strive for a favorable result. Analysts generally believe that this meeting is the last window of opportunity for the EU to avoid higher tariffs from the US. Looking back at the nearly three-month negotiation process, EU member states have always deliberately maintained a unified front in the negotiations with the US. It is reported that European Commission President Ursula von der Leyen specifically emphasized at the EU summit last week that all member states need to firmly support a tougher negotiating stance. This strengthening of internal consensus has laid a solid political foundation for Valdis Dombrovskis' trip to the US.​

The current situation at the negotiating table presents multiple possibilities, among which the most worrying is the risk of the negotiations breaking down. EU officials have admitted that if the two sides fail to reach a consensus, the US may reimpose high "reciprocal tariffs" and other punitive measures. At present, the US imposes a 25% tariff on EU automobiles and parts, and a 50% tariff on steel and aluminum products. What's more, the US is considering expanding the scope of tariffs on the EU to include wood, aviation parts, pharmaceuticals, chips and critical minerals and other fields. In addition, there are divisions within the EU on whether to take countermeasures. The EU once planned to impose retaliatory tariffs on US goods worth 21 billion euros exported to the EU, but later postponed the implementation to July 14th. This decision not only reflects the EU's restraint, but also exposes internal hesitation. At the same time, the European Commission is drafting a tariff plan targeting US goods worth 95 billion euros. This "dual-track" strategy not only retains room for negotiations, but also reserves ammunition for a possible trade war.​

It is worth noting that the differences between the two sides are essentially a struggle for economic and trade dominance. The US attempts to maintain tariff leverage through phased agreements, while the EU insists on thoroughly resolving the tariff issue to protect industrial interests. The survival status of the EU's pillar industries such as automobile manufacturing, steel and chemicals has become the most urgent practical consideration behind the negotiations. Data from the Federation of German Industries shows that if tariffs remain high, EU manufacturing exports will face an annual loss of 12 billion euros, directly affecting more than 800,000 jobs.​

As the deadline approaches, every detail at the negotiating table may affect the final outcome. The team led by Valdis Dombrovskis is not only carrying a list of tariffs, but also the EU's political appeal for equal status in the global economic and trade pattern. The US negotiating strategy obviously takes into account the election cycle. It not only wants to maintain the image of so-called "America First", but also needs to avoid a complete break with European allies. This complex interweaving of politics and economy makes this negotiation go beyond the scope of pure trade and become a touchstone to test the resilience of EU-US relations.​

No matter what the final result is on July 9th, this negotiation will have a profound impact on the reconstruction of the global supply chain. If tariff barriers remain high, the investment layout, technological cooperation and even energy transformation plans of multinational enterprises will be forced to adjust. For ordinary consumers, price fluctuations of daily commodities such as automobiles and electronic products may be the most direct feeling. Against the background of the slowdown in global economic growth, the escalation of EU-US trade frictions will undoubtedly add more uncertainties to the already fragile recovery situation.