EU–US Trade Talks Accelerate as Tariff Deal Nears

EU–US Trade Negotiations Accelerate with 15% Tariff Deal in Sight

Trade talks between the European Union (EU) and the United States have picked up significant speed, raising hopes of a long-awaited deal on a 15% tariff covering most EU exports to the US. This comes on the heels of a finalized US-Japan agreement, though Treasury Secretary Scott Bessent emphasized that the Japan deal won't serve as a template for EU negotiations.

No Clear Template from Japan Deal

Despite some similarities, US officials clarified that the EU must propose new terms if it wants to avoid steeper tariffs. The pre-announcement rhetoric had been anything but reassuring, with escalating language from President Donald Trump and reported EU preparations for counter-tariffs.

EUR/USD Supported by Deal Optimism

The EUR/USD pair rebounded toward 1.18 following reports that a 15% tariff deal could soon be finalized — a notably lower rate than the 25% previously threatened. The potential inclusion of major car exports makes the deal more attractive for EU member states, and market reaction indicates optimism for a euro-friendly outcome.

ECB Meeting Unlikely to Shift the Narrative

Amid these trade developments, the upcoming European Central Bank (ECB) meeting is not expected to bring surprises. The focus remains firmly on international trade policy and its impact on the Eurozone's economic stability.

Trump’s Final Say: Wildcard for Markets

While the framework for a deal appears to be forming, the final outcome hinges on President Trump’s approval. He may:

• Sign the 15% tariff deal,
• Activate prior threatened tariffs from his August 1 letter,
• Or pivot in a completely different direction.

Given Trump’s past positioning on EU trade, uncertainty remains high.

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