The global trade landscape is entering another volatile chapter, with the United States launching a tightly choreographed negotiation schedule involving 18 countries—conspicuously excluding China. This effort, rolled out in a three-week cycle of rotating discussions with six countries per week, is aimed at resetting tariff relationships ahead of the looming July 8 deadline, when a temporary pause on reciprocal tariffs expires.

Among the most consequential fronts in this evolving trade dynamic is the U.S.-EU relationship. What was once a relatively cooperative transatlantic alliance is now strained by conflicting agendas, misaligned priorities, and mounting regulatory divergence.

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EU Seeks to Make Concessions—But Faces Resistance

In an attempt to repair fraying ties and preempt escalating tariffs, the European Union has put forward a substantial offer: EUR 50 billion in purchases of U.S. liquefied natural gas and agricultural products. This is not merely a gesture of goodwill—it’s a calculated move to appeal to U.S. economic and political interests, particularly those tied to energy security and the farm belt.

But the American response has been less than enthusiastic. U.S. Trade Representative Jamieson Greer reportedly told Republican senators that Europe is “not engaging,” suggesting that the EU’s overtures may be viewed in Washington as insufficient or insincere.

This disconnect underscores a broader strategic gap. While the EU appears to be operating under the assumption that economic gestures can smooth tensions, the U.S. is demanding a deeper overhaul of Europe’s internal policies and regulatory direction.

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Internal EU Politics Create External Friction

One of the core issues blocking progress is the digital services tax imposed by several EU member states. U.S. Treasury Secretary Bessent pointedly remarked that the EU must first “resolve internal matters” before any serious trade talks can begin. The digital tax, viewed in Washington as unfairly targeting American tech giants, is a persistent thorn in the side of transatlantic cooperation.

This regulatory divergence is not limited to tax policy. The U.S. is also pushing back against the EU’s proposed AI Code of Practice, which reflects broader differences over how emerging technologies should be governed. These clashes aren’t just technical—they reflect differing philosophies about data, sovereignty, and market control.

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Germany Pushes for a Deal, While the U.S. Stalls

Despite the discord, some EU leaders remain hopeful. German Finance Minister Joerg Kukies has expressed confidence that a resolution can be achieved within the 90-day window. Germany, as Europe’s largest economy and a major industrial exporter, has a strong incentive to de-escalate the trade conflict before tariffs resume in July.

But optimism is tempered by the lack of clarity from Washington. After a key meeting in D.C., EU Trade Commissioner Maros Sefcovic reportedly left with little insight into the U.S. position. That uncertainty casts doubt on the feasibility of reaching an agreement within the tight timeframe.

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The Industrial Goods Proposal: A Glimmer of Hope?

In a bid to find common ground, the EU has floated the idea of “zero-for-zero” tariffs on industrial goods—a revival of a proposal that has circulated in prior negotiations. This would eliminate tariffs on a broad category of goods, potentially offering a win-win outcome for manufacturers on both sides.

Yet it remains unclear whether the U.S. is open to this deal structure. While such an agreement could alleviate some pressure on transatlantic supply chains, it may not be enough to satisfy the broader set of political and strategic demands coming from Washington.

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What’s Next?

As negotiations proceed, the stakes are growing. If no resolution is found by July 8, the current pause on reciprocal tariffs will expire, and a new round of trade barriers could snap into place—threatening everything from European auto exports to American tech services.

For now, the EU is positioning itself as ready to deal. But unless the U.S. defines a clear, coherent strategy and addresses its own internal differences, the trade impasse may continue to harden.

This isn’t just a standoff over numbers and tariffs—it’s a deeper test of whether the U.S. and Europe can reestablish trust and find a new equilibrium in an increasingly fragmented global economy.