EU and US aim for political understanding to resolve tariff dispute

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🗞️ Driving the news: The EU and the US are negotiating a resolution to their ongoing tariff dispute, with the deadline for a deal approaching on 9 July
• The EU and US are aiming for a "political understanding" rather than a comprehensive agreement
• This would outline the broad framework for future negotiations, leaving more specific sectoral talks for later

🔭 The context: The current tariff dispute stems from measures introduced during the Trump administration, including a 25% tariff on car imports and a 50% tariff on steel and aluminium from the EU
• The US has imposed these tariffs since mid-2018, prompting retaliatory measures from the EU
• Both sides have been under increasing pressure to reach an agreement as the 9 July deadline approaches, when the US could impose further tariffs on EU imports

🌍 Why it matters for the planet: The EU and US have significant global economic influence, and resolving trade tensions could benefit broader international trade dynamics
• However, a lack of resolution might exacerbate trade barriers and further disrupt industries, including those critical to the green transition, such as energy and technology
• The tariff dispute has the potential to affect global supply chains and environmental policies in key sectors

⏭️ What's next: The EU is expected to negotiate a framework that would establish a baseline 10% tariff on EU imports, with the possibility of sector-specific exemptions
• Diplomatic efforts will intensify as key figures such as European Commission Vice President Maroš Šefčovič travel to Washington
• The EU will also consider retaliatory measures if the negotiations fail
• A final resolution may be reached in stages, addressing broader political agreements first, with sectoral details to follow

💬 One quote: “If there is to be an agreement, the most realistic outcome would likely be a general framework or a 'principle agreement' — something that, due to time constraints, would resemble the kind of understanding the US has reached with the UK or even with China,” — a senior EU diplomat

📈 One stat: The US currently imposes tariffs of 50% on EU steel and aluminium, 25% on cars, and 10% on all EU imports

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