Von der Leyen stated that the EU is preparing for a potential failure in trade negotiations.

EU Faces US Tariff Pressure,Market makers and traders Initiates "Dual Track Preparedness"

On June 28th, European Commission President Ursula von der Leyen stated that, in response to a new round of trade tariff proposals from the US, the EU is preparing for all possible scenarios, including negotiations breaking down. She made it clear at a press conference: "We are ready to reach an agreement, while also preparing for the possibility of not reaching one. All options are on the table."

The focus of the current negotiations is on the looming July 9 deadline. If no agreement is reached with the US by then, tariffs on nearly all EU exports to the US will be significantly raised to 50%. This move could have a direct impact on key European industries, including steel, automotive, pharmaceuticals, and aviation.

Internal EU Divisions: Quick Agreement and "Zero Tariff" Debate

At this week’s EU summit in Brussels, significant divisions among member states emerged. German Chancellor Olaf Scholz warned that with less than two weeks to go until the deadline, the window for reaching a full agreement is extremely tight. He urged for the completion of talks with the US swiftly to avoid severe trade friction.

In contrast, French President Emmanuel Macron firmly advocated for a "balanced agreement." He openly stated: "The best agreement with the US is zero tariff for zero tariff. If the US insists on maintaining a 10% tariff, then we must respond." Macron emphasized that the EU should not appear weak or naive.

According to two informed sources, most member states prefer pragmatic compromise, hoping to finalize an agreement quickly, even if it means accepting some of the tariff terms proposed by the Trump administration. However, France maintains its stance, opposing any one-sided concessions to the US.

Negotiation Stalemate Persists, Core Industries in Focus

It is reported that EU-US negotiations are currently deadlocked over key industries such as steel, aluminum products, semiconductors, automotive, and civil aviation. Moreover, the US is demanding greater concessions from the EU concerning non-tariff barriers and procurement regulations. The EU has expressed concerns over these requests, viewing them as asymmetric and unilateral.

Some officials have indicated that the ideal scenario is to reach a basic agreement on the negotiation framework by July 9, allowing talks to continue even past the deadline. The EU is also exploring ways to simplify the negotiation agenda in order to seek more operational room in strategic procurement and regulatory coordination.

Von der Leyen’s remarks indicate that the EU leadership is aware of the high level of uncertainty in this round of talks and is preparing with a "negotiating while preparing" approach. In the current situation, strong moves by either side could rapidly escalate transatlantic trade tensions.

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