【Text by Observers Network, Liu Bai】The US and EU are still in a tough tug-of-war over tariff issues. According to the Financial Times on July 19, citing multiple sources, US President Trump has proposed higher demands in negotiations, requiring a minimum tariff of 15% to 20% on EU goods in any agreement, testing the EU's tolerance limit. In previous weeks, the EU and the US aimed to maintain a base tariff rate of 10% for most goods.

Sources also said that Trump showed no interest in the EU's latest proposal for mutual reduction of car tariffs, favoring the continued imposition of a 25% tariff on European cars. Analysts believe the possibility of reaching a trade agreement before August 1 is decreasing.

Another European official said that in response to Trump's tariffs, the EU is preparing a "four-pronged" approach, including sincere negotiations, preparing countermeasures, coordinating with other countries, and enhancing European competitiveness.

Trump announced in early April that he would impose a 20% "reciprocal tariff" on EU goods, and notified the EU on the 12th to raise the tariff to 30%, effective August 1. The EU is also facing a 50% tariff on steel and aluminum and a 25% tariff on cars from the US.

The EU's chief trade negotiator, Maros Sefcovic, informed EU officials about the recent talks in Washington on the 18th. Two people who were aware of the meeting content said he made a pessimistic assessment.

On July 18, Barcelona, Spain. Barcelona Port, one of Europe's largest ports, with containers and cargo ships moored at the port. Visual China

A US official told the Financial Times that even if the US and EU reach an agreement, these agreements' "reciprocal tariffs" will be higher than 10%.

As EU member states become increasingly pessimistic about the prospects of reaching an agreement, German Chancellor Merkel warned on the 18th that the US had responded coldly to the EU's proposal to reduce industry tariffs.

He said, "Whether we can set industry rules, whether we can differentiate between certain industries and others, remains an unresolved issue. The EU supports this, while the US is more cautious."

A senior EU diplomat said that if Trump insists on a permanent "reciprocal tariff" of 15% to 20%, it would not be much better than the 20% tariff announced in early April, and may prompt the EU to take countermeasures.

"We do not want a trade war, but we don't know whether the US will leave us any room for choice," the EU official said.

Another EU diplomat added, "It is now clearly turning into an atmosphere supporting retaliation," "we will not accept a 15% tariff."

The EU has drafted multiple counter-tariff schemes, but has repeatedly postponed implementation. Earlier this year, the EU approved the first round of counter-tariffs against the US, involving 21 billion euros worth of goods exported to the US, but the measure was suspended until August 6 to allow for negotiation time.

The European Commission proposed a second round of countermeasures on the 14th, covering aircraft, cars, machinery, and agricultural products, valued at 72 billion euros, pending approval.

Despite Trump's threat to increase tariffs, European countries remain divided on whether to further raise their negotiating leverage against the US.

According to an EU official's description, the current internal discussions within the EU are still "preparatory" in nature, aiming to prevent the talks from collapsing before the deadline. "The basic principle is, if we ultimately fail to reach an agreement, don't wait until there's no way out before asking what to do."

Facing Trump's tariff threats, the EU plans to use "four strategies" to resolve the situation.

Michal Baranowski, Deputy Secretary of the Polish Ministry of Development and Technology, told CNBC that the EU implements a four-step strategy in the process of seeking an agreement.

"The first step is to engage in sincere negotiations with US officials."

"The second step, if an agreement cannot be reached, we have prepared countermeasures. We have countermeasures against the steel and aluminum tariffs and the so-called 'reciprocal tariffs' covering 72 billion euros."

"The third step is to consult with other countries that are also affected by US tariffs. Although not formal coordination, we want to understand the positions of other countries because they are somewhat on the same side in negotiations with the US."

"The fourth step is to comprehensively enhance European competitiveness."

EU data shows that the US-EU relationship is the largest bilateral trade and investment relationship in the world, accounting for nearly 30% of global goods and services trade and contributing to 43% of global GDP.

In just the past year alone, trade between the US and the EU reached 1.68 trillion euros, equivalent to daily trade of about 4.6 billion euros.

Baranowski said that the EU is the "most important economic partner" of the US, and the US-EU trade relationship is crucial for both sides, "both sides have significant gains and losses."

CNBC reported that a key element of the EU's negotiation strategy is proposing a reciprocal tariff cut on cars.

The Financial Times reported on the 17th that the EU is prepared to lower the 10% tariff on US car exports, provided that the Trump administration reduces the tariff on European cars to below 20%.

Earlier this year, Trump had imposed a 25% tariff on foreign-made vehicles, which severely hit European automakers, such as Swedish Volvo, whose operating profit in the second quarter of 2025 dropped significantly.

Different from the long-term trade deficit in goods, the US has a long-term trade surplus in services with Europe. According to the European edition of the "Politico" website, if tensions escalate, this could become a "fatal weakness" for the US. In fact, within the EU, whether to strike back at the service sector has been a topic of discussion, but due to the hope of reaching a preliminary agreement, this option was temporarily put on hold.

Countries such as France have been urging Brussels to adopt a tougher stance in negotiations with the US. French President Macron even called for using the EU's most powerful "anti-coercion instrument" (ACI) to combat US services. The ACI would allow the European Commission to restrict American companies from participating in EU public procurement or further limit the operations of large tech companies in the EU.

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Original: https://www.toutiao.com/article/7528963888805593609/

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