Von Der Leyen Says EU Will Be Ready If US Trade Talks Break Down

The European Union is prepared for all eventualities in its trade negotiations with the US, including for a breakdown in talks, Ursula von der Leyen said, after discussing the latest proposals from the Trump White House with the bloc's leaders. 

The European Commission president said at a press conference in the early hours of Friday that her team is still assessing the latest US tariff offer.

“We are ready for a deal. At the same time we are preparing for the possibility that no satisfactory agreement is reached,” she said. “In short, all options remain on the table.”

The question dogging the leaders and the commission, which handles trade matters for the EU, is whether to accept an asymmetrical trade deal with the US or to strike back, risking escalation and the ire of the US president.  

At a summit meeting in Brussels that began Thursday, several member states argued against retaliation. Most suggested that a quick deal with the US is better than holding out for a perfect one, even if that means that many of Trump's tariffs remain in place, according to two people briefed on the discussions. 

The EU needs to reach an agreement with Trump by July 9, when levies on nearly all of the bloc's exports to the US increase to 50%. The US president says the EU takes advantage of US with its goods surplus and perceived barriers to American trade.

German Chancellor Friedrich Merz said he'd stressed that deadline to fellow leaders in Brussels, urging them to reach a solution quickly now to remove the threats hanging over key industries.

“We have less than two weeks,” he said. “You can't agree a sophisticated trade agreement in that time.”

Paris, however, rejects the idea of accepting any deal skewed in favor of the US and pushed for a complete removal of tariffs, another official said. French President Emmanuel Macron told reporters after the summit that a quick deal is preferable — but only so long as it is “balanced.”

“The best tariff deal with the US would be zero to zero,” Macron said, insisting that if the US decides to keep 10% tariffs, the bloc would have to respond. “Otherwise we would be naive, or weak, or both,” he said. “And we are neither.”

Detailed discussions with the US are taking place on both tariffs and non-tariff barriers, as well as on key sectors, strategic purchases and regulatory matters the EU is hoping to address through its simplification agenda, said the people, who spoke on the condition of anonymity. 

The US is asking the EU to make what the bloc's officials see as unbalanced and unilateral concessions, Bloomberg reported earlier. Discussions on critical sectors — such as steel and aluminum, automobiles, pharmaceuticals, semiconductors and civilian aircraft — have been particularly difficult.

Officials believe the best-case scenario remains an agreement on principles that would allow the negotiations to continue beyond an early July deadline.

Alongside a 10% universal levy on most goods — which is currently facing a US court challenge — Trump has introduced 25% tariffs on cars and double that on steel and aluminum based on a different executive authority. He's also working to expand tariffs on other sectors, including pharmaceuticals, semiconductors and commercial aircraft.

Many of those duties are expected to stay, regardless of an agreement with the Trump administration, according to the people. The EU, which has been seeking a mutually beneficial deal, will assess any end-result and at that stage decide what level of asymmetry — if any — it's willing to accept.

The EU's industry chief, Stephane Sejourne, told Bloomberg this week that the EU would need to respond to any tariffs — including a baseline 10% levy — with countermeasures. But some EU leaders, including Italy's Giorgia Meloni have indicated that they could live with some levies if it allows for a rapid deal that avoids an escalation in the conflict.

During the Brussels summit, the bloc also set its sights on the bloc's broader trade relations. Macron and Merz signaled that European leaders agreed in principle to signing a long-sought free trade agreement with the South American Mercosur bloc, which France has opposed. 

The German leader also praised von der Leyen's suggestion at the summit to launch a new international trade organization to supersede what he called the “dysfunctional” World Trade Organization. Von der Leyen first floated the idea at the Group of Seven conference in Canada earlier this month, according to a source with knowledge of the matter.

If the WTO remains in trouble, he said, “we who continue to believe that free trade is right must come up with something new.”