By Jorge Liboreiro

Welcome back to this year’s most talked-about, obsessively dissected show: the EU-US trade talks. In this episode, we’re treated to yet another cliffhanger that will leave viewers on the edge of their seats, holding their breath and clutching their pearls: a new deadline.

Until now, virtually every nation on Earth had been working on the assumption that a trade deal (or anything resembling that concept) with the US had to be struck by 9 July, the cut-off date that Donald Trump imposed when he famously announced a temporary pause of his self-styled, randomly-calculated “reciprocal” tariffs. Trump repeatedly invoked 9 July as an aggressive tactic to prod countries into offering concessions that could palliate his many grievances. 

Brussels took serious note. The European Commission sent its top officials on back-and-forth trips across the Atlantic Ocean to understand what exactly the White House was after. Experts were put on a race against the clock to design a trade deal between two of the world’s largest economies. Ursula von der Leyen dangled her offer of a “zero-for-zero” deal on tariffs in every speech and held several phones call with Trump to “fast-track” negotiations.

But as the deadline neared, a realisation dawned upon: no such deal would be achieved. At the very best, the bloc could aspire to an “agreement in principle,” a non-binding compendium of commercial terms and commitments that could be sold as a victory and fleshed out at a later stage. The victory, of course, would be mainly for Trump.

EU officials have essentially resigned themselves to a 10% baseline tariff for most EU-made products. The focus is now on securing as many exemptions as possible for strategic sectors such as spirits and aircraft. Hopes for a “win-win” partnership have faded away. The confidence of retaliation is nowhere to be seen. A face-saving mindset has taken over. Behind the scenes, diplomats from member states wonder: What price are we willing to pay for a bad deal?

The answer varies according to the capital you ask. For Germany and Italy, export-oriented economies with deep ties to the American market, an agreement must happen at all costs. Businesses, they say, deserve a degree of certainty to plan their international operations, even if that certainty comes with a 10% (or higher) tariff attached. For France and the Nordics, it’s worth picking up a fight, even if it hurts. The EU, they say, might lack a mighty army or world-leading tech hub, but it has the economic firepower to stand up to Washington’s earth-scorching tactics.

 
Caught in the middle is the European Commission, keenly aware of the political stakes at play and its heavy responsibility as chief negotiator. The executive, it must be said, has been playing its role with award-winning earnestness and composure. Just earlier this week, the Commission was insisting the deadline remained 9 July, despite no signs whatsoever of a deal in sight. Now, the official line is that a deal is “possible” in the “coming days,” ideally before the new deadline of 1 August. 

“We are working non-stop to find an initial agreement with the US, to keep tariffs as low as possible,” Ursula von der Leyen said, departing from her “zero-for-zero” offer. “But we are also not naïve, we know the relationship with the US may not return to what it once was.”

There’s still plenty of naivety, nonetheless. Brussels, with its arsenal of battled-tested experts, remains intent on addressing the negotiations as an inherently trade matter. Imports, exports, quotas, barriers, percentages, exemptions, so on and so forth. Washington, by contrast, has an all-encompassing view of tariffs that sucks in any other topic that might cross Trump’s mind.

 
On Wednesday, Trump threatened to impose a 50% tariff on Brazil, a major trading partner, in retaliation for a completely non-economic matter: the trial of former president Jair Bolsonaro, who is accused of attempting to overturn his 2022 election loss. (Trump once faced a similar charge.)

“This Trial should not be taking place,” Trump wrote on Truth Social. “It is a Witch Hunt that should end IMMEDIATELY!”

The bold threat was shocking but also disarmingly honest. Trump has at long last stop pretending that his tariffs are actually about trade. For him, tariffs are an extension of America’s hard power to bend the will of sovereign nations and accomplish his worldview. Brussels has long suspected an ulterior motive, given the White House’s criticism towards the bloc’s VAT system and digital regulations. It now has incontrovertible evidence of the charade it has chosen to legitimise.

“Nobody knows what Trump wants,” a diplomat said. “If there’s no deal, who knows?”

Send in the clowns.