Trump says 50-50 chances of negotiating a trade deal with European Union

President Donald Trump put the odds of striking a trade deal with Europe to reduce the tariff rate on their imports at 50-50, even as diplomats from the trading bloc have expressed optimism in recent days that an agreement could be near. 

“I would say that we have a 50-50 chance, maybe less than that, but a 50-50 chance of making a deal with the EU,” Trump told reporters Friday before departing for a golf trip to Scotland.  

But, in a signal of how quickly fortunes can turn in the trade negotiations, Trump then said US and EU negotiators were working “closely” to strike a deal and predicted an agreement could come to fruition. 

 

“I think EU has got a pretty good chance of making a deal,” Trump added. 

Trump earlier this month issued a letter saying the EU would face a 30 per cent tariff on most goods if they fail to reach an agreement by Aug. 1, in addition to sector-specific tariffs. Trump has hit cars and auto parts with a 25 per cent customs tax, and steel and aluminum with a rate double that. He’s also threatened to target pharmaceuticals and semiconductors with new duties as early as next month, and recently announced a 50 per cent duty on copper. 

European negotiators are optimistic they can strike a deal that would set a 15 per cent baseline for most exports, with hopes that duties at that level would also cover categories like automobiles that are facing industry-specific duties. They also hope to set a quota for lower tariffs for some steel and aluminum products. 

The EU may also receive limited carve-outs linked to aviation, some medical devices and generic medicines, several spirits, and manufacturing equipment. 

Tariff Letters 

Trump told reporters that he also expected to issue around 200 additional letters unilaterally setting tariff levels on other trading partners in the coming days, saying he viewed most rates as essentially settled at this point. He also downplayed the notion that the UK would be able to trade an elimination of their digital services tax for further reductions to steel and aluminum tariffs. 

“If I do it for one, I have to do it for all,” Trump said. 

The president also singled out at least one ally — Canada — as unlikely to see a new deal before the deadline.

“We haven’t really had a lot of luck with Canada,” Trump said. “I think Canada could be one where they’ll just pay tariffs, not really a negotiation.” 

Trump has threatened a 35 per cent tariff on Canadian goods — up from an existing 25 per cent — but aides have said they don’t expect it to apply to imports shipped under the US-Mexico-Canada trade agreement brokered during the president’s first term. 

On another major trading partner, China, Trump expressed confidence that upcoming trade talks in Stockholm could yield progress. 

The US and China have the “confines of a deal,” Trump said. 

The US president also praised Australia after his announcement on Thursday that the country would remove import restrictions on US beef. 

“Australia was great. They opened up beef yesterday for the first time ever,” Trump said, indicating he believed it was an effort to advance trade negotiations. 

“We asked them to do it, and all of a sudden we got word that they would, so obviously they’re looking to do something,” Trump said.