UPDATE 2-US trade deal eludes Europe days out from Trump’s deadline, sources say

European Union negotiators have failed so far to achieve a breakthrough in trade negotiations with the Trump administration and may now seek to extend the status quo to avoid tariff hikes, six EU diplomats briefed on the talks said on Friday. The EU had already dropped hopes of a locking in a comprehensive trade agreement ahead of Trump's July 9 deadline, but following talks in Washington it was not clear if it would even secure a lighter agreement in principle. The Commission told EU envoys on Friday afternoon that it believed the United States was willing to "pause" the current tariffs in place for partners with which it reached an initial agreement, with possible tariff relief later.

Without a preliminary agreement, broad U.S. tariffs on most imports would rise from their current 10% to the rate set out by President Donald Trump

on April 2. In the EU's case that would be 20%. The Commission said that at one point the United States had mooted a 17% tariff on

EU agri-food imports , the sources said.

Two of the EU diplomats who spoke to Reuters said the Commission appeared to be pushing more for the first option, to extend the status quo, and then seek to negotiate further. U.S. Treasury Secretary Scott Bessent said on Thursday that negotiations were set to continue into the weekend. The EU currently faces 50% tariffs on steel and aluminium exports to the United States, 25% tariffs on cars and car parts and a 10% levy on most other products.

The EU has agreed a package of 21 billion euros ($24.7 billion) of countermeasures, but not put them into place. The bloc is also looking into a second package, originally envisaged at 95 billion euros. That has now been whittled down to 72 billion euros after lobbying from various EU members, two of the diplomats said. The EU negotiators had left for Washington accepting they might not persuade the United States to lower its baseline tariff below 10%, but seeking immediate relief from tariffs in key sectors such as aircraft and aircraft parts, as well as reduced rates for cars and metals. A third source described the situation after the talks as "still very much in flux and hard to predict". Another described the outlook as "gloomy".

($1 = 0.8490 euros)

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