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Investing.com-- U.S. officials have told the European Union they expect President Donald Trump to demand further concessions for a trade agreement, including a baseline tariff of 15% or higher on most European goods, The Wall Street Journal reported on Sunday, citing people briefed on the talks.
The move surprised EU negotiators, who had been preparing to accept a 10% baseline tariff. The shift prompted Germany, previously pushing for compromise, to align more closely with France’s tougher stance, according to the report.
In response, EU member states are pressing the European Commission to prepare countermeasures, including tariffs on U.S. goods, restrictions on digital services, and limits on public procurement access, the report said.
Officials are also considering triggering the bloc’s rarely used “anticoercion” instrument, which allows retaliatory trade and investment measures against economic pressure, the WSJ reported.
Despite rising tensions, both sides still hope to reach a deal before Trump’s self-imposed August 1 deadline. Commerce Secretary Howard Lutnick expressed optimism on Sunday, but European diplomats warned that if talks fail, “all options will hurt.”
More than $5 billion in goods and services flows between the U.S. and EU daily, making the dispute one of the most consequential in global trade, the report added.