MNI: EU-US Deal Hinges On Rule Exemptions Vs Market Access

Clinching an EU-U.S. trade framework deal by Wednesday’s deadline will come down to a difficult trade-off between U.S. demands for sweeping exemptions from EU regulations for its tech, digital, auto and food sectors and an EU wishlist of tariff carve-outs on cars, agri-food, commercial aircraft, spirits and pharma products, officials in Brussels told MNI. 

President Donald Trump is expected to send out letters later on Monday to the EU as well as many other trade partners, setting out proposed tariff levels. In the case of the EU, there is an expectation that a baseline tariff of no more than 10% can be secured, but that will depend on a difficult "framework" compromise on non-tariff barriers between the two sides.

The latter is expected to be a non-binding four- to five-page document in which many issues will remain unresolved. The EU is also pushing for a "standstill" on any new tariffs during follow-up talks to secure a final and comprehensive deal. (See MNI: EU Split On Whether To Accept Flawed US Deal By Deadline)

QUID PRO QUO

"U.S. Treasury Secretary [Scott] Bessent has been clear that punitive tariffs are not for major trade partners - such as EU - it'll be baseline 10% in exchange for market access," one official said. "It comes down to what can the EU give and what can it get in return." 

Addressing U.S. requests for EU regulatory exemptions in sectors such as tech, digital, agri-food and autos will be tough, given resistance within the Commission and even stiffer opposition in the European Parliament. 

Sources said that the EC will be hoping that the quid pro quo in terms of enhanced market access in the key sectors cited above will be enough to overcome these internal EU redlines.