With the July 9 deadline looming, European and U.S. trade negotiators are racing against the clock. If no deal is reached, President Trump has threatened up to 50% tariffs on EU exports, including autos, pharmaceuticals, and steel.

In Washington this week, EU Trade Chief Maroš Šefčovič has met with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to hammer out a basic “agreement in principle”. Sources suggest this framework may allow 10% tariffs across the board—a compromise U.S. negotiators might accept to avoid the steeper proposed sanctions on key industries.

But EU leaders, including Germany’s Chancellor Friedrich Merz, are pushing for swift decisions. Chancellor Merz cautioned that reaching a swift, straightforward agreement is preferable to dragging out talks with complex, drawn-out negotiations.

Europe is willing to tolerate a temporary standstill if it buys time for deeper talks. Still, some major sectors, particularly automobiles, remain unresolved, leaving both sides precariously close to zero-sum tariffs.