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European Commission President Ursula von der Leyen will meet U.S. President Donald Trump on Sunday in Scotland after EU officials and diplomats indicated that a framework trade deal is expected to be reached this weekend. The deal would likely include a 15% baseline tariff on all EU goods entering the United States, along with a 50% tariff on European steel and aluminum.
After a positive call with @POTUS, von der Leyen said they agreed to meet in Scotland on Sunday to discuss transatlantic trade relations. Trump mentioned there was a 50-50 chance or perhaps less that the U.S. would reach a trade agreement with the European Union, adding that Brussels wanted “to make a deal very badly.”
“We are close to an agreement and it is possible we will reach it during the weekend,” one senior EU official stated. Trump plans to visit his golf courses in Scotland and meet British Prime Minister Keir Starmer on Monday.
European luxury and auto shares, two sectors most exposed to tariffs along with wine and spirits, rose following news of potential progress. LVMH and Europe’s largest car manufacturer Volkswagen closed up around 4% and 3%, respectively, the biggest gainers.
Combining goods, services, and investment, the EU and the United States are each other’s largest trading partners by far. In March, the American Chamber of Commerce in Brussels warned that any conflict could jeopardize $9.5 trillion of business in the world’s most important commercial relationship.
The EU faces U.S. tariffs on more than 70% of its exports – 50% on steel and aluminum, 25% on cars and car parts, and a 10% levy on most other goods, which President Trump has said he would hike to 30% on August 1. EU officials warned that such levels would devastate transatlantic commerce. Further tariffs on copper and pharmaceuticals are also looming.
The EU has prepared countermeasures that could enter into force on August 7 if talks break down. Even with a 15% tariff, French car parts supplier OpMobility expressed concern over the bloc’s inability to negotiate better terms than its individual countries.
“In the short term, we can probably say that we’ve avoided the worst, but that doesn’t mean it’s a good deal,” CEO Laurent Favre said. Meanwhile, VW’s chief executive Oliver Blume told investors that the carmaker hoped investment commitments could help win further concessions on U.S. tariffs once Washington and the EU had struck a broad trade deal.
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What is the expected outcome of the meeting between Ursula von der Leyen and Donald Trump in Scotland?
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