Trump, EU chief seek deal in transatlantic trade standoff

Trump, EU chief seek deal in transatlantic trade standoff

Trump has said he wants to strike 'the biggest deal of them all' with EU chief Ursula von der Leyen

US President Donald Trump and EU chief Ursula von der Leyen met Sunday for make-or-break talks in Scotland, aimed at ending a months-long transatlantic trade standoff, as negotiations went down to the wire.

Trump again told reporters he felt the two sides had a 50-50 chance of a deal with the European Union. The bloc faces an across-the-board US levy of 30 percent unless it strikes a trade pact by August 1.

Washington warned Sunday there would be "no extensions" and Trump confirmed "the deals all start on August 1".

Von der Leyen's European Commission, negotiating on behalf of EU countries, is pushing hard for a deal to salvage a trading relationship worth an annual $1.9 trillion in goods and services.

The EU chief said at the start of the talks at Trump's luxury golf resort in southwestern Turnberry that if they reached a deal "I think it would be the biggest deal each of us has ever" made.

According to an EU diplomat briefed ahead of the meeting, the contours of a deal are in place, but key issues still need settling.

"A political deal is on the table -- but it needs the sign-off from Trump, who wants to negotiate this down to the very last moment," the diplomat told AFP.

The proposal, they said, involves a baseline levy of around 15 percent on EU exports to the United States -- the level secured by Japan -- with carve-outs for critical sectors including aircraft and spirits, though not for wine.

Any deal will also need to be approved by EU member states -- whose ambassadors, on a visit to Greenland, were updated by the commission Sunday morning. They would meet again after any accord.

According to the EU diplomat, the 27 countries broadly endorsed the deal as envisaged -- while recalling their negotiating red lines.

- Baseline 15 percent -

The Trump-von der Leyen meeting was taking place in the president's luxury golf resort in Turnberry on Scotland's southwestern coast.

The 79-year-old Trump said Friday he hoped to strike "the biggest deal of them all" with the EU.

The EU is focused on getting a deal to avoid sweeping tariffs that would further harm its sluggish economy -- while holding out retaliation as a last resort.

Under the proposal described to AFP, the EU would commit to ramp up purchases of US liquefied natural gas, along with other investment pledges.

Pharmaceuticals -- a key export for Ireland -- would also face a 15-percent levy, as would semi-conductors.

The EU also appears to have secured a compromise on steel that could allow a certain quota into the United States before tariffs would apply, the diplomat said.

But Trump said Sunday trade tariffs with the EU would not be lower than 15 percent.

- Auto sector -

The EU has been hit by multiple waves of tariffs since Trump reclaimed the White House. It is currently subject to a 25-percent levy on cars, 50 percent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatens to hike to 30 percent in a no-deal scenario.

It was unclear how the proposed deal would impact tariff levels on the auto industry, crucial for France and Germany. Carmakers are already reeling from the levies imposed so far.

While 15 percent would be much higher than pre-existing US tariffs on European goods, which average around 4.8 percent, it would mirror the status quo, with companies currently facing an additional flat rate of 10 percent.

Should talks fail, EU states have greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels is also drawing up a list of US services to potentially target.

Beyond that, countries including France say Brussels should not be afraid to deploy a so-called trade "bazooka" -- EU legislation designed to counter coercion that can involve restricting access to its market and public contracts.

But such a step would mark a major escalation with Washington.

- Ratings dropping -

Trump has embarked on a campaign to reshape US trade with the world, and has vowed to hit dozens of countries with punitive tariffs if they do not reach a pact with Washington by August 1.

US Commerce Secretary Howard Lutnick said Sunday the August 1 deadline was firm and there will be "no extensions, no more grace periods."

Polls suggest however the American public is unconvinced by the White House strategy, with a recent Gallup survey showing his approval rating at 37 percent -- down 10 points from January.

Having promised "90 deals in 90 days," Trump's administration has so far unveiled five, including with Britain, Japan and the Philippines.

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Originally published as Trump, EU chief seek deal in transatlantic trade standoff