BRUSSELS — The European Union is eyeing a Japan-style deal with the Donald Trump administration that sets a 15 percent U.S. baseline tariff — but is ready to retaliate if no agreement can be reached by an Aug. 1 deadline, according to EU diplomats briefed on the talks.
If Trump blocks a deal now in the works, the EU is ready to launch two separate countermeasures, three diplomats told POLITICO. One would impose tariffs on €93 billion worth of U.S. goods. A vote to finalize this part of the retaliation is due on Thursday, with the Commission expected to garner broad support from the EU’s 27 governments.
The second would involve the much broader Anti-Coercion Instrument, one of the diplomats said, adding that there seems to be a broad majority among EU governments — if there is no deal — to “establish coercion,” which is a requirement to trigger the instrument.
Another diplomat said the instrument could be used to target U.S. digital and financial services specifically.
Speaking ahead of a meeting in Berlin, German Chancellor Friedrich Merz and visiting French President Emmanuel Macron expressed cautious hopes that a deal was possible — but avoided commenting in detail.
“We share a willingness to give stability and to have tariffs that are as low as possible,” said Macron. “Negotiations are underway, I will not go into the technical details now, but the goal is … to finalize as fast as possible and as well as possible the tariffs file.”
Merz said he would discuss trade with Macron, among other issues, adding that “decisions could possibly be made.”
Currently, the EU and the U.S. are eyeing a deal with a 15 percent baseline tariff, which would largely mirror an accord the U.S. clinched with Japan, according to four diplomats, including the three cited above, who were granted anonymity to discuss the confidential negotiations.
Cars and car parts would also see their tariff reduced from 25 to 15 percent. Other sectors that got hit by U.S. tariffs, like steel and aluminum, are still under discussion. Another diplomat said EU ambassadors will likely need to be available during the summer break in August to field any potential deal.
In return for a $550 billion investment in the States, Trump early on Wednesday agreed to charge Japan a 15 percent tariff, including on cars. He later dropped a post on Truth Social, saying that countries that don’t open up will face higher tariffs rather than a lower one like Japan.
However, it was Japan’s financing arrangement that allowed Tokyo to seal a trade deal with the U.S., Treasury Secretary Scott Bessent said — indicating that the EU cannot simply hope to seal a similar deal with Washington.
Koen Verhelst and Antonia Zimmermann reported from Berlin. Nette Nöstlinger reported from Berlin. Giorgio Leali contributed reporting from Paris. This story has been updated.
