President Donald Trump is set to meet with European Commission President Ursula von der Leyen at his Turnberry golf club in Scotland this Sunday, aiming to resolve ongoing trade tensions between the United States and the European Union.
The meeting comes after weeks of intensive negotiations as Brussels works to solidify a deal that would avert a looming transatlantic trade war. European ministers hope the discussions can lead to an agreement that avoids the 30 percent tariffs Trump has threatened on EU goods.
Sources involved in the talks indicate that European negotiators are aiming to reduce those tariffs to 15 percent, a move they believe could lead to a more amicable relationship with the U.S.
Trump conveyed optimism about the talks, stating that the EU “want[s] to make a deal very badly.” This follows his warning on July 12 that he would impose a 30 percent tariff if no agreement was met by his deadline, which has since passed. Currently, U.S. tariffs of 25 percent on cars and car parts, along with 50 percent on steel and aluminium, are already in effect.
As the largest trading partner of the U.S., the EU has often been at the receiving end of Trump’s aggressive trade rhetoric. The president has accused the bloc of “ripping off” America, a claim that has fueled recent tensions.
In 2024, EU exports to the United States reached a staggering 532 billion euros ($603 billion), with a significant portion of these exports consisting of pharmaceuticals, car parts, and industrial chemicals, as reported by EU data.
Given the stakes, many are watching closely to see if the Trump-von der Leyen meeting will yield a breakthrough that would alleviate the uncertainty surrounding transatlantic trade ties.
However, the path to an agreement is fraught with obstacles. Trump identified “20 sticking points” in the negotiations, yet he refrained from elaborating on their specifics. Despite the challenges, he has described von der Leyen as a “highly respected woman” and predicted a “good” meeting, placing the odds of achieving a deal at around 50-50.
On the European side, some EU countries are advocating for the immediate implementation of retaliatory tariffs on the U.S. worth around 90 billion euros ($109 billion), affecting products such as car parts and bourbon, if the discussions fall through.
The U.S. and EU engage in a robust trade relationship, with a total trade volume of 1.6 trillion euros ($1.8 trillion) in goods and services in 2023. Since April 9, the U.S. has maintained a temporary flat 10 percent tariff on all EU products, in addition to existing 25 percent and 50 percent tariffs on individual goods.
EU Trade Commissioner Maros Sefcovic voiced a strong position, stating, “We have to protect the EU economy, and we need to go for these rebalancing measures,” a sentiment reflecting a growing disunity among EU members regarding trade strategies.
While Germany is keen on rapidly concluding a deal to protect its industrial base, France and other nations insist on a balanced agreement that does not disproportionately favor U.S. interests.
A spokesperson for von der Leyen remarked that the leaders would take stock of the negotiations and consider the potential for a balanced outcome that ensures stability for businesses and consumers on both sides of the Atlantic.
The trade dynamics reveal that in 2024, U.S. imports from the EU amounted to $606 billion, comprising primarily of pharmaceuticals, mechanical appliances, and vehicles.
Conversely, U.S. exports to the EU, including fuel, machinery, and aircraft, totaled approximately $370 billion. Notably, the U.S. operates a trade deficit in goods with the EU, underscoring the complexity of the negotiation landscape.
Challenges in finalizing a trade deal stem from Trump’s insistence that the EU reduce its goods trade surplus with the U.S. He has continuously criticized European policies, such as the value-added tax and regulations affecting food exports and IT services, which he perceives as non-tariff barriers.
Sefcovic has indicated that addressing this surplus may require more significant purchases of U.S. gas, weapons, and farm products from Europe, aiming to appease American concerns and facilitate a deal.
Nevertheless, European leaders demand respect as equal partners in negotiations. Macron highlighted this sentiment, insisting that while lower tariffs are desired, the EU must not be treated as second-class by the U.S.
Danish Foreign Minister Lars Lokke Rasmussen warned that the EU should be ready to utilize all necessary tools if the negotiations fall apart.
Oxford Economics projected that a 30 percent tariff could push the EU economy to the brink of recession, which would have ripple effects on certain U.S. industries as well.
The potential for European countermeasures raises concerns that U.S. farmers and auto workers, vital constituencies for Trump, could experience substantial income losses.
As the clock ticks down, the upcoming meeting between Trump and von der Leyen represents a critical juncture for transatlantic relations and the broader economic landscape.
image source from：aljazeera
