Tensions are rising in the ongoing trade negotiations between the United States and the European Union (EU), as Berlin and Brussels demand concrete concessions before accepting a proposed uniform 10% tariff pushed by the White House. According to a report by Reuters, the EU is seeking exemptions from U.S. tariffs across several critical sectors, including pharmaceuticals, alcoholic beverages, medical technology, semiconductors, and aircraft.
European negotiators argue that without immediate implementation of these exemptions, any agreement would be ’empty’ and have made it clear they won’t accept a general framework that only comes into effect months later. Existing U.S. tariffs—25% on European cars and 50% on steel and aluminum—remain on the table, with the EU insisting they are unfair, politically motivated measures distorting market dynamics.
As reported by the Financial Times, the EU has made it known that it will not rule out walking away from talks if tangible progress isn’t achieved before the July 9 deadline. EU Trade Commissioner Maroš Šefčovič is currently in Washington, aiming to finalize a ‘political framework agreement’ covering both tariff and regulatory issues.
Although a technical extension until September remains possible, the window for meaningful consensus is narrowing. Recent developments indicate that Washington sent an initial draft document outlining its positions to the EU side—a proposal that reportedly contains no clear concessions or provisions for phasing out tariffs. Instead, it reiterates the U.S. demand for a broad 10% tariff regime across all goods, without mentioning exemptions or reciprocal commitments.
European diplomats have interpreted this stance as an attempt to pressure the bloc into accepting a ‘horizontal solution’ without receiving anything in return, shifting the full burden of negotiation pressure onto Brussels.
Meanwhile, uncertainty is already affecting markets. European stocks edged lower on Monday as investors cautiously monitor the talks, fearing potential trade disruptions in case of failure. Banking circles warn that a potential tariff escalation within July could even influence central banks’ monetary policy decisions, particularly ahead of upcoming meetings by the European Central Bank (ECB) and the Federal Reserve (Fed).
With the critical July 9 deadline approaching, both sides are walking a tightrope—either a limited deal emerges to prevent new tariffs, or a fresh cycle of transatlantic trade conflict begins.