Streamlined Customs Deal Under Pressure: Merz and Macron Urge Swift US Agreement with EU
Leaders Merz and Macron advocate for a swift customs agreement with Trump
Time is running out fast. In less than two weeks, the deadline for a customs agreement between the US and the EU looms. A new proposal from the US is being reviewed in Brussels. Chancellor Merz and President Macron are pushing hard for a speedy resolution.
With just 14 days left until President Trump's deadline for trade negotiations expires on July 9, a sense of urgency is growing. Merz and Macron are urging a quick agreement with Washington. EU Commission President von der Leyen indicated the EU is ready to strike a deal but is also readying for the possibility of "no mutually satisfactory agreement."
After the recent NATO summit, Merz told reporters that world leaders had encouraged and pushed von der Leyen to reach a quick deal with the Americans. The negotiations are being led by the EU Commission, with the deadline set by Trump. Macron also called for a swift end to negotiations but stressed, "not at any cost."
Following his earlier criticism of the Commission's negotiating strategy as "too complex," Merz toned down his criticism. He had earlier demanded a basic agreement for the automotive, chemical, and pharmaceutical industries, as well as steel and aluminum exports, at a Federation of German Industries (BDI) event.
"I didn't attack the Commission," Merz clarified, adding, "I just wanted to make it clear that in the remaining time, we can't agree on a sophisticated trade agreement." Brussels insiders share Merz's sentiments, questioning the feasibility of Trump agreeing to abolish all mutual tariffs in individual areas as the Commission initially planned. "We must now quickly reach a result, and we are all agreed on that," Merz reiterated.
Negotiations are rumored to be under the "Swiss cheese" model, according to an EU diplomat. This means a general US tariff of around ten percent might stay if exceptions apply for key sectors such as steel and the automotive industry. These sectors have been heavily impacted by Trump's tariffs, with an increased tariff rate of 25 percent applied to them.
Von der Leyen informed heads of state and government about the progress of the negotiations. "We have received the latest US document for further negotiations. We are currently analyzing it," she told journalists.
The US President's trade policies have ignited disputes with trade partners worldwide. In April, Trump imposed high additional tariffs on numerous countries, later reducing them to 10 percent for 90 days. After July 9, these tariffs could double or, as Trump has threatened, even quintuple.
If negotiations fail, the EU has prepared counter-tariffs, which remain on hold. This includes a list of tariffs on items such as jeans, aluminum products, and motorcycles, already approved by EU countries. Further tariffs are in the works, potentially affecting US products worth around 100 billion euros. Compared to US tariffs that could affect European products worth 370 billion euros.
- Tariffs
- Donald Trump
- Friedrich Merz
- Emmanuel Macron
- Ursula von der Leyen
Insights:- Deadline set by Trump for US-EU trade negotiations expires on July 9, 2025. If no agreement is reached, EU has prepared counter-tariffs.- "Swiss cheese" model for the agreement implies selective tariff exemptions in a patchwork of duty-free and tariffed goods. This approach can address key areas of contention without overhauling the entire tariff framework.- Complex trade and political realities necessitate the tailored relief approach of the "Swiss cheese" model, allowing partial openings that can accommodate sensitive industries or political red lines.
In the midst of the looming deadline for a customs agreement between the US and the EU, President Trump's trade policies have sparked disputes worldwide. Despite calls from leaders like Friedrich Merz and Emmanuel Macron for a swift resolution, the EU Commission is also proposing to increase the number of EU-funded projects in the field of education and training, hinting at a broader scope of concerns beyond just the trade negotiations.
