EU braces for partial deal as US tariffs likely to remain

EU Signals Limited Breakthrough in US Trade Talks as Tariff Disputes Persist

Brussels warns that full tariff removal is unlikely amid delicate negotiations with Washington

As trade negotiations between the European Union and the United States resume with renewed intensity, EU officials are preparing for a less-than-ideal outcome. Despite signs of progress, the European Commission has acknowledged that many of the punitive tariffs imposed by the US may remain in place.

Persistent tariffs threaten transatlantic trade balance

Speaking before Members of the European Parliament on Thursday, senior Commission trade official Matthias Jørgensen indicated that the EU may be forced to accept a continued tariff regime on key exports to the US.

“It’s very possible that we do not get rid of all the tariffs. Then we might have to rebalance on our side,” Jørgensen said, referring to the European Commission’s €95 billion retaliation package.

The tariffs, introduced by the Trump administration in mid-March, include 25% duties on EU steel and aluminium, 25% on automobiles, and a blanket 10% on all other EU imports. These measures now affect nearly 70% of all EU exports to the US.

Limited margin for reduction sparks internal EU tensions

According to a European diplomat quoted by Euronews, recent talks suggest little room for reduction. “It will be difficult to go below 10% US tariffs,” the diplomat said, adding that such an outcome would be controversial within the EU Council.

Member states are divided in their responses: while France and Germany are expected to resist any acceptance of high tariffs, countries like Hungary, Ireland, and Italy are seen as more flexible.

Poland’s Undersecretary of State for Economic Affairs, Michal Baranowski, predicted challenges ahead. “We would have a very hard time in the Council with 10% tariffs,” he warned.

Progress, but regulatory red lines remain

Despite weeks of deadlock, EU Trade Commissioner Maroš Šefčovič reported renewed momentum in negotiations. He described his recent call with US Trade Secretary Howard Lutnick as “constructive” and confirmed that technical talks will be intensified.

Šefčovič has already visited Washington three times and expects to meet US Trade Representative Jamieson Greer soon, potentially during upcoming OECD meetings.

In an effort to sweeten the deal, the EU has offered concessions including facilitating imports of US liquefied natural gas, soybeans, and AI technologies. Proposals for zero tariffs on industrial goods are also on the table.

However, EU negotiators are drawing a firm line on non-tariff issues.

“EU legislation is not on the table,” said Jørgensen, stressing the bloc’s regulatory autonomy. “Each side needs to respect the other’s rules.”

EU prepares retaliation list amid lobbying

Should negotiations fail to restore previous trade conditions, the Commission may activate its extensive €95 billion retaliation package. EU officials say letting the current imbalance continue is “not an option.”

The list is currently under consultation with industries and member states, and intense lobbying is under way. France, Italy, and Spain are pushing to exclude American bourbon whiskey from the list to prevent counter-retaliation against their wine and spirits exports—a tactic that proved successful during earlier phases of the dispute.

Aircraft industry again in spotlight

Tensions are also flaring over the aviation sector. The US launched an investigation after the EU’s inclusion of Boeing in its new draft retaliation list. European champion Airbus may soon find itself targeted in a renewed phase of the long-running transatlantic aircraft dispute.

“We are engaging actively at expert and political levels,” Šefčovič said, but cautioned that rebalancing the relationship may require difficult compromises.

With the EU and US inching toward a potential trade compromise, expectations remain tempered. Tariffs are likely to endure in some form, but EU negotiators hope strategic concessions and targeted retaliation can preserve critical sectors and prevent further escalation.

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