FT: US and EU close in on 15% tariff deal

The EU and US are closing in on a trade deal that would impose 15 per cent tariffs on European imports, similar to the agreement Donald Trump struck with Japan this week, according to the Financial Times, Report informs.

Brussels could agree to the so-called reciprocal levies to avoid the US president’s threat to raise them to 30 per cent from August 1, three people familiar with the situation told the Financial Times.

“The Japan agreement made clear the terms of the shakedown,” said one EU diplomat. “Most member states are holding their noses and could take this deal.”

Both sides would waive tariffs on some products, including aircraft, spirits and medical devices, the people said.

The European Commission, which runs EU trade policy, briefed envoys from member states on Wednesday following talks with US counterparts.

News of the prospective deal boosted the euro, which recouped earlier losses to trade flat on the day against the dollar. US stocks extended gains, with the S&P 500 up 0.6 per cent.

The US has been charging an extra 10 per cent tariff on EU exports since April while talks between Washington and Brussels continued. That was on top of pre-existing duties averaging 4.8 per cent.

The people said they understood the 15 per cent minimum tariff would include those existing duties, so Brussels views a deal on those terms as cementing the status quo. Tariffs on cars, which are currently 27.5 per cent, would therefore fall to 15 per cent.