• The European Union is aiming to complete negotiations on its trade deal with the U.S. this month, according to top EU trade negotiator Bernd Lange.
  • Talks intensified after President Donald Trump threatened to raise tariffs on European cars to 25% if progress stalls.
  • EU officials say they support the agreement but want safeguards in case the U.S. changes tariff terms or fails to uphold its commitments.

May Deadline

The European Union is pushing to finalize its trade deal with the United States by the end of May, with negotiators reporting progress but acknowledging remaining gaps, particularly on safeguard mechanisms. Bernd Lange, the EU's top trade negotiator, said on Thursday that both sides are working intensively to bridge differences. The timeline gained urgency after President Donald Trump warned he would impose 25% tariffs on European car imports if talks falter.

Safeguard Standoff

A key sticking point is the EU's demand for robust safeguards that would allow it to suspend or tighten concessions if U.S. actions threaten European industry. EU lawmakers are pressing for automatic triggers tied to import surges, while the U.S. side has pushed back, arguing for more limited protections. "Without a credible safeguard clause, the deal would leave our manufacturers exposed," said a senior EU official familiar with the negotiations. The official spoke on condition of anonymity because the talks are private.

Market Implications

The deal could eliminate tariffs on billions of euros in goods, stabilizing supply chains and boosting transatlantic trade. However, uncertainty over enforcement has left some investors cautious. "The market is pricing in a positive outcome, but any delay could trigger volatility," said a trade analyst tracking the negotiations. EU exporters, particularly in machinery and chemicals, stand to benefit, while U.S. agricultural producers are eyeing greater access to European markets.

Next Steps

Negotiators are working against a tight calendar, with EU legislative approvals needed before the deal can take effect. The European Parliament is expected to vote on the agreement in June, though amendments could slow the process. The U.S. Trade Representative's office declined to comment on the talks. If a deal is not reached this month, the EU could face renewed tariff threats, raising the stakes for both sides.

Correction: An earlier version of this article misstated the timeline for EU legislative approvals. The vote is expected in June, not July.