Reference News Network, July 25 report - According to the website of the UK's Financial Times on July 23, the EU and the US are approaching a trade agreement that would impose a 15% tariff on European goods exported to the US, similar to the deal President Donald Trump reached with Japan this week.

Three people familiar with the situation told the Financial Times that Brussels may agree to so-called "reciprocal tariffs" to avoid the threat by the US president to raise tariffs to 30% from August 1st.

An EU diplomat said: "The US-Japan agreement clarified the terms of extortion. Most member states may reluctantly accept this agreement."

The sources said that both sides will exempt some products from tariffs, including airplanes, spirits and medical equipment.

After holding talks with the US side, the European Commission, which is responsible for formulating EU trade policy, informed ambassadors from member states on July 23.

News of the potential agreement boosted the euro exchange rate. The US stock market continued to rise, with the S&P 500 index rising 0.6%.

Since April this year, EU exporters have been paying an additional 10% tariff on goods sent to the US. This is in addition to the existing average tariff of 4.8%.

The sources said they learned that the minimum 15% tariff would include the existing tariffs, so Brussels believes that reaching an agreement under these conditions would consolidate the status quo. The car tariff, currently at 27.5%, would thus be reduced to 15%.

German Chancellor Friedrich Merz said he hopes the agreement to end the US-EU trade dispute will be immediately reached.

Merkel said during a bilateral meeting with French President Emmanuel Macron in Berlin: "We hope to make a decision on trade issues right now."

Earlier this year, Trump used the national security law to impose higher industry tariffs on imports of cars and car parts. EU officials have strongly pushed for the exemption of these tariffs for European automakers.

Two sources said that the agreement between the US and Japan has pushed Brussels to reluctantly accept higher reciprocal tariff rates to avoid a destructive trade war.

If Trump tries to take more advantage or fulfills his threat to increase the reciprocal tariffs to 30% from August, the EU can still retaliate.

This includes initiating the EU's "Anti-Coercion Instrument," also known as its "trade rocket launcher." The Anti-Coercion Instrument, never used before, would give Brussels flexibility to prevent American companies from participating in public tenders, cancel intellectual property protections, and restrict imports and exports.

The aforementioned sources also said that the EU will continue to prepare for a possible 93 billion euros (approximately 109 billion US dollars) retaliatory tariff plan - with a maximum rate of 30% - in case an agreement cannot be reached before August 1.

A US official said the situation remains unstable and could change. (Translated by Yang Xinpeng)

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