Core Points - The trade negotiations between the US and EU are at a critical juncture, with the US extending the deadline for "reciprocal tariffs" from July 9 to August 1, but tensions remain high [1] - The US is using tariffs as a pressure tool, demanding economic and regulatory concessions from the EU, while the EU struggles to balance a "principled agreement" with protecting its core interests [1][2] - The EU is considering countermeasures, including a plan to impose tariffs on US imports worth €21 billion, with a potential maximum tariff of 50% [2] Group 1: US Negotiation Strategy - The US has imposed a 10% base tariff on imports since early 2025 and plans to impose tariffs ranging from 25% to 40% on products from 14 countries starting August 1 [2] - The US aims for the EU to import more products from the US, such as natural gas, cars, and military equipment, while opposing EU consumer and climate protection regulations [2][3] - The US believes that certain EU taxes and antitrust actions against US tech companies are unfair [2] Group 2: EU Response and Internal Dynamics - The EU is firmly rejecting the US's demands for "reciprocal openness," particularly in technology regulation, fearing it would undermine internal regulatory unity [2][3] - There is a lack of consensus among EU member states, with Germany advocating for a swift agreement to protect its export industries, while Italy seeks to maintain good relations with the Trump administration [3][4] - France and Spain adopt a tougher stance, emphasizing the need to uphold European values and policies, while some Eastern European countries express concern over sacrificing their industries for EU unity [3] Group 3: Potential Outcomes and Implications - The EU may accept a "principled framework agreement" with the US, maintaining a 10% tariff on most exports while negotiating specific tariff reductions in areas like automobiles [5] - Experts warn that such an arrangement may not resolve structural issues between the US and EU, with potential conflicts over digital service taxes and green subsidies remaining unresolved [5] - The negotiations reflect a shift in global trade governance, with bilateral negotiations gaining precedence over multilateralism, raising concerns about the EU's strategic autonomy and bargaining power in future trade discussions [5]