Seoul Gazette - Trump, EU chief seek deal in transatlantic trade standoff

Trump has said he sees a one-in-two chance of a deal with the European Union, which faces an across-the-board US levy of 30 percent unless it strikes a trade pact by August 1 -- with Washington warning Sunday there would be "no extensions."

Von der Leyen's European Commission, negotiating on behalf of EU countries, is pushing hard for a deal to salvage a trading relationship worth an annual $1.9 trillion in goods and services.

According to an EU diplomat briefed ahead of the meeting, set for 4:30 pm (1530 GMT), the contours of a deal are in place after talks went late into Saturday night -- but key issues still need settling.

And of course the final word lies with Trump.

"A political deal is on the table -- but it needs the sign-off from Trump, who wants to negotiate this down to the very last moment," the diplomat told AFP.

The proposal, they said, involves a baseline levy of around 15 percent on EU exports to the United States -- the level secured by Japan -- with carve-outs for critical sectors including aircraft and spirits, though not for wine.

Any deal will need to be approved by EU member states -- whose ambassadors, on a visit to Greenland, were updated by the commission Sunday morning, and would meet again after any accord.

According to the EU diplomat, the 27 countries broadly endorsed the deal as envisaged -- while recalling their negotiating red lines.

- Baseline 15 percent -

The Trump-von der Leyen meeting was taking place in Turnberry on Scotland's southwestern coast, where the president owns a luxury golf resort. He was out on the course for much of the weekend.

The 79-year-old Trump said Friday he hoped to strike "the biggest deal of them all" with the EU.

"I think we have a good 50-50 chance," the president said, citing sticking points on "maybe 20 different things".

The EU is focused on getting a deal to avoid sweeping tariffs that would further harm its sluggish economy -- while holding out retaliation as a last resort.

Under the proposal described to AFP, the EU would commit to ramp up purchases of US liquefied natural gas, along with other investment pledges.

Pharmaceuticals -- a key export for Ireland -- would also face a 15-percent levy, as would semi-conductors.

The EU also appears to have secured a compromise on steel that could allow a certain quota into the United States before tariffs would apply, the diplomat said.

- Questions on auto sector -

Hit by multiple waves of tariffs since Trump reclaimed the White House, the EU is currently subject to a 25-percent levy on cars, 50 percent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatens to hike to 30 percent in a no-deal scenario.

It was unclear how the proposed deal would impact tariff levels on the auto industry, crucial for France and Germany, with carmakers already reeling from the levies imposed so far.

While 15 percent would be much higher than pre-existing US tariffs on European goods -- averaging 4.8 percent -- it would mirror the status quo, with companies currently facing an additional flat rate of 10 percent.

Should talks fail, EU states have greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels is also drawing up a list of US services to potentially target.

Beyond that, countries like France say Brussels should not be afraid to deploy a so-called trade "bazooka" -- EU legislation designed to counter coercion that can involve restricting access to its market and public contracts.

But such a step would mark a major escalation with Washington.

- Ratings dropping -

Trump has embarked on a campaign to reshape US trade with the world, and has vowed to hit dozens of countries with punitive tariffs if they do not reach a pact with Washington by August 1.

US Commerce Secretary Howard Lutnick said Sunday the August 1 deadline was firm and there will be "no extensions, no more grace periods."

Polls suggest however the American public is unconvinced by the White House strategy, with a recent Gallup survey showing his approval rating at 37 percent -- down 10 points from January.

Having promised "90 deals in 90 days," Trump's administration has so far unveiled five, including with Britain, Japan and the Philippines.

T.Gil--SG