MNI: EU Countries See US Shift In Tone But Trade Deal Unlikely

European Union officials have noted a “change in tone” from the U.S. administration regarding trade discussions during meetings held at the World Bank and International Monetary Fund’s Spring Meetings, though they continue to view the prospects for a formal agreement as remote, officials from both governments and central banks told MNI.

A speech delivered by U.S. Treasury Secretary Scott Bessent at the IMF on Thursday, in which he criticised both the Fund and the World Bank for mission creep but said Washington stands ready to work with them in their core roles was welcomed by several European government officials as a sign that the Trump administration wants to engage with economic structures rather than displace them.

“It has been useful for us to see that there are still some red lines that won’t be crossed,” said one official, referring to Washington’s ongoing engagement with multilateral institutions.

Officials also sense a shift in the U.S. approach towards Europe, and believe there is real intent on the American side to pursue a meaningful deal. However, many remain sceptical about the feasibility of such an agreement, citing both political timing and economic constraints, and adding that Washington’s objectives remained unclear beyond a short-term improvement in the U.S. trade balance.

“I believe they really want a deal, but I don’t think it will be possible because they are asking about a reduction of the trade deficit in the time horizon of Trump’s term,” said another official. “That won’t be possible to accommodate, as it does not ultimately depend on governments.”

ACTING AS A BLOC

European officials stressed that the European Commission cancelled all planned tariff retaliation following the 90-day reprieve announced by U.S. President Donald Trump, while some American tariffs remained in place “to give an opportunity for a negotiation.”

“We decided to assume the cost of these tariffs that are currently in place to show a good intention,” a third official said, adding that the Trump administration might have been taken aback by the level of unity shown by European countries.

“We have to behave as a bloc if we want to be treated as a bloc,” added another.

Should talks fail during this 90-day window, officials warned that the EU would inevitably respond to tariffs—likely through more nuanced measures than those already outlined by European Commission President Ursula von der Leyen. (See MNI: EU Opts For Longer Wait Before Targeting U.S. Services)

“It will be much more sophisticated than just raising goods rates tariffs,” one source said, noting that Europe is deliberately negotiating quietly and keeping its strategic options open.

“We are very used to long, exhausting negotiations among countries and we know that the best deal is the one that leaves all parts equally unhappy,” another added. (See MNI: EU Liberation Day Retaliation May Take Time - EU Source)

CHINA
European unity is notably weaker when it comes to the bloc’s approach to trade relations with China. Countries such as Italy are more sympathetic to the U.S. call for reaching an agreement among strategic allies before engaging with China as a bloc, while others, such as Spain, see no disadvantage in maintaining independent ties with Beijing.

These positions—reflected in varying degrees across member states—are expected to evolve in the coming months, particularly as a European delegation prepares to visit China.

“We want to de-risk but not to decouple from China,” said one official.

Another factor on European minds is the risk that China diverts goods previously intended for the U.S. towards the EU, with no consensus among European Central Bank officials as to whether this would constitute a new structural disinflationary force or rather be more short-lived.