The EU agrees to a 10% general tariff exemption for key US industries, with automobiles and steel becoming the focus of the EU's efforts.

The EU and the US are entering the final stage of negotiations regarding a trade agreement. According to sources, the EU has agreed in principle to accept the US-proposed 10% universal tariff plan, but is demanding equal concessions from the US in key areas such as pharmaceuticals and semiconductors. The focus of the negotiation is on tariffs on cars and metals: the EU is pressuring Washington to reduce the current 25% tariffs on cars and components and 50% tariffs on steel and aluminum, and is seeking quota exemptions. An internal assessment by the EU Trade Commission believes that the current negotiation framework is slightly in favor of the US, but is still acceptable. The negotiation pressure is unprecedented, and if an agreement is not reached by July 9, the EU's tariffs on US exports will increase to 50%. Data shows that in 2024, the EU's exports of cars and components to the US amount to 52.8 billion euros (approximately 62.2 billion US dollars), and steel and aluminum exports amount to 24 billion euros, with Germany, Italy, and France dominating metal exports. Currently, US tariffs cover 380 billion euros of EU exports to the US, accounting for 70% of its total exports, forming a substantial trade barrier. The negotiation process is progressing on multiple fronts. EU Trade Commissioner Maros Sefcovic will lead a delegation to the US this week to advance negotiations, with both sides exploring a comprehensive agreement covering tariff reductions, non-tariff barriers removal, strategic procurement cooperation, and other content. The EU has proposed to solve technical trade barriers through a simplified agenda, and is willing to engage in joint procurement in areas such as liquefied natural gas and artificial intelligence. However, the core conflict still revolves around the extent of tariff reductions and the exemption mechanism for future tariffs. The details of the negotiation proposal put forth by the US have not been fully disclosed. According to the EU, the US proposal involves three main sections: tariff systems, non-tariff barriers, and strategic cooperation, but key data such as specific tariff rates have not been disclosed to member states. The EU negotiating team is facing four possible outcomes: reaching a moderate reciprocal agreement, accepting unilateral concessions, postponing negotiations, or a tariff war. The last scenario would trigger an EU retaliatory tariff list, including the approved 21 billion euros in tariffs on US soybeans, Shenzhen Agricultural Power Group, motorcycles, and the 95 billion euros in tariffs being prepared for Boeing aircraft, US-made cars, bourbon whiskey, and other goods. This negotiation reflects deeper economic power struggles. The Trump administration has continuously expanded its tariff arsenal through Section 232 to revitalize domestic manufacturing and fill revenue gaps from tax cuts. The EU, on the other hand, is trying to find a balance between maintaining a multilateral trade system and addressing unilateralism, preparing for reciprocal countermeasures while emphasizing cooperation in the face of common economic security challenges. As the negotiation deadline approaches, both sides are engaged in final negotiations on key terms such as the extent of tariff cuts, industry exemption scopes, and future tariff commitments, the results of which will directly impact the trans-Atlantic trade landscape.