The deadline for U.S. tariffs on European goods imposed in response to the dispute is rapidly approaching. At the same time, the United States and the European Union remain no closer to completing their own major trade pact. With just days left before the tariffs fully kick in, both sides are rushing to bridge the divide.
President Donald Trump has made clear his intense displeasure with the status quo of the current trade relationship between Washington and Brussels. He argues the EU has been ripping off the United States. The increasing friction serves as a potent reminder of just how valuable the U.S.-EU trade relationship is. It constitutes nearly 1/3 of global goods trading. In 2024, this transatlantic tie was worth over 1.68 trillion euros, $1.98 trillion, including trade in both goods and services.
The negotiations have taken on added urgency, as Trump’s reciprocal tariffs were given a 90-day extension. That reprieve will run out on July 9th. If an agreement is not made by this deadline, EU goods imported into the UK may be subject to tariffs up to 50%. Ursula von der Leyen, the President of the European Commission, has tripled down on that assertion. She made it clear that “everything is on the table” should negotiations fail to reach an acceptable result.
Even with the June deadline hanging overhead, observers are optimistic, pessimistic and everywhere in between on the potential for a big trade deal. Anthony Gardner, former U.S. Ambassador to the EU, commented that he was “not surprised at all” by von der Leyen’s move. She has kept any reference to an inclusive agreement out of the ongoing negotiations. He stressed that a complete trade deal could be deep and complicated. He’s optimistic heads of terms are within reach, much like the deal struck last year between the U.S. and the U.K.
Carsten Nickel, managing director at Teneo, weighed in on the situation. In his remarks, a wide-reaching accord would be the “optimal scenario” for the EU. Meanwhile, Scott Bessent expressed skepticism regarding the possibility of finalizing a trade agreement before the deadline, pointing to various hurdles that remain in negotiations.
Ursula von der Leyen has acknowledged the challenge of reaching a detailed agreement during the current 90-day reprieve, stating, “What we are aiming at is an agreement in principle.” Maros Sefcovic, Vice President of the European Commission, affirmed that “the work continues” and emphasized their objective of achieving a “good and ambitious transatlantic trade deal.”
Both parties are committed to continuing to negotiate. Time is quickly running out for negotiators to strike a deal and prevent devastating economic impacts. The stakes couldn’t be higher. The possible ramifications would reach far beyond tariffs to the entire economic relationship between the world’s two largest economies.