The EU could be set to accept some US tariffs in the long term as part of a deal with the country, a top German government adviser has suggested.
Speaking at an FT Live event yesterday (19 June), German chancellor Friedrich Merz’s Europe adviser, Michael Clauss, said the EU is considering something “a little bit along the model of the US-UK [agreement]”, rather than pushing for a fully-fledged trade deal by a tariff deadline set by the US on 9 July.
Without an agreement, the US rate on EU imports is set to increase from its current ‘baseline’ level of 10% to as high as 50%. Additional tariffs of 50% are also set to come in on metals, cars and other specific sectors if an agreement is not reached.
‘Landing zone’
Clauss suggested the EU might seek a “landing zone” of the current 10% rate for now, before addressing specific sectoral tariffs later.
Direct trade policy retaliation from the EU in the form of higher tariffs could be on the backburner, officials have told the FT, as Brussels is concerned over a lack of consensus for the measures.
There is also a suggestion from anonymous EU diplomats that the EU could accept the reality of a 10% rate to avoid higher threatened tariffs on specific products, including European wines and spirits.
The UK-US Economic Prosperity Deal (EPD), signed by prime minister Sir Keir Starmer and president Donald Trump earlier this week in Canada, has seen the UK accept the baseline 10% tariff on goods entering the US, while also allowing for concessions including tariff-free automobile quotas.
A similar deal for the EU is “doable,” Clauss said.
“But is it going to happen? I think it’s too early to say.”
‘Sticky issue’
Five sources speaking to Reuters said that “10% is a sticky issue”, and though the EU is “pressing” the US on it, “now they are getting revenues” it could be difficult to force a change.
That difficulty was demonstrated in remarks from Trump earlier this week, when he said that he doesn’t feel that the EU “is offering a fair deal yet” on trade.
Speaking to reporters following his appearance at the G7 summit in Canada, Politico reports, Trump repeated his claim that the EU was built with the express aim of “hurt[ing] the US on trade”. He added that “they’re either going to make a good deal, or they’ll just pay whatever we say they have to pay” in the form of tariffs.
In separate remarks on the “tough” negotiations with Japan on tariffs, he outlined his broader approach:
“Ultimately, you have to understand we’re just going to send a letter saying ‘this is what you’re going to pay; otherwise, you don’t have to do business with us’.”
Ursula von der Leyen, president of the European Commission, said in a Bluesky post that “we instructed the teams to accelerate their work to strike a good and fair deal” following a meeting with Trump.
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