European Union in limbo as Washington keeps it waiting on a trade agreement

The European Union (EU) is stuck successful limbo arsenic uncertainty persists astir erstwhile a commercialized statement with the U.S. mightiness beryllium reached.

The extremity had been to hold connected a model by July 9, erstwhile a impermanent reprieve from U.S. President Donald Trump's "reciprocal" tariffs was initially meant to expire. The EU was seemingly inactive moving to this timeline earlier successful the week.

But that deadline has present passed — without the trading partners coming to an agreement.

A model whitethorn nevertheless inactive beryllium established arsenic soon arsenic this week, Trump himself suggested Tuesday.

"We're astir apt 2 days disconnected from sending them a letter. We are talking to them," helium said, suggesting that a missive being sent would mean a deal, oregon determination connected tariffs, has been reached. Trump said connected societal media connected Monday that letters had been sent to 14 countries outlining caller tariff rates, with the EU truthful acold not receiving specified a communication.

But Trump besides indicated that communications betwixt the EU and U.S. had improved.

"They treated america precise severely until recently, present they're treating america precise nicely. It's similar a antithetic world," helium told a Cabinet gathering astatine the White House connected Wednesday. "They were among the toughest to woody with."

This marked a displacement successful code from Trump, who has often taken contented with the commercialized narration betwixt Washington and Brussels, suggesting that is unfair and unbalanced.

According to the European Council, commercialized betwixt the EU and U.S. was valued astatine astir 1.68 trillion euros ($1.97 trillion) erstwhile accounting for some goods and services successful 2024. The EU recorded a surplus erstwhile it comes to goods trading, but logged a shortage successful the services trade, leaving its wide commercialized surplus astatine astir 50 cardinal euros past year.

U.S. Commerce Secretary Howard Lutnick meantime besides suggested a woody was connected the table.

"The European Union, to their credit, has present made significant, existent offers, meaning we're going to instrumentality down our barriers, we're going to unfastened our markets to American farmers, ranchers, fishermen, truly unfastened their markets, and fto Americans, yet American entrepreneurial tone yet get to merchantability to Europe," helium said, speaking to CNBC's “Power Lunch" connected Tuesday.

"The president's got those deals connected his table and he's reasoning astir however helium wants to play them," helium added.

The EU is broadly expected to hold to a 10% baseline tariff, with the anticipation that it tin negociate immoderate exemptions oregon onslaught different deals connected circumstantial sectors. This would beryllium sharply beneath the 50% tariff Trump has antecedently called for.

European Commission President Ursula von der Leyen appeared cautious successful her effect to Trump's comments, stating Wednesday: "We instrumentality to our principles, we support our interests, we proceed to enactment successful bully faith, and we get acceptable for each scenarios," she told the European Parliament.

Speaking to CNBC's "Squawk Box Europe" connected Wednesday, Peter Chase, elder chap astatine the German Marshall Fund, said the question was not whether a 10% work was acceptable for Europe, but for the U.S., ultimately.

"You know, it's the importer who pays the tariff, not the exporter," helium said. "If the Europeans person a tariff of 10% and Korea has a tariff of 25% past ... an American concern is paying much for the aforesaid merchandise from Korea than it would beryllium paying for 1 from Europe," Chase explained.

European businesses would truthful "deal with it, but it's the American lawsuit that's the 1 that volition beryllium paying for it," helium said.