The outcome of ongoing trade negotiations between the U.S. and the European Union remains uncertain, and analysts at Barclays warn that tensions could escalate.
European trade representatives held meetings in Washington this week with officials from the Trump administration, as a temporary halt on broad U.S. “reciprocal” tariffs is set to expire on Wednesday.
Despite the discussions, no agreement has been finalized. The EU is pushing for a preliminary deal that would provide immediate tariff relief for key industries.
Media outlets have reported that the deal could involve the European Commission — the EU’s main trade negotiator — accepting a standard 10% U.S. tariff in return for reduced duties on certain sectors.
However, some voices in Brussels are urging a firmer EU position, pressing for a reduction in the 10% tariff rate.
Barclays analysts, led by Silvia Ardagna, noted that EU member states remain divided on the strategy. Germany and Italy favor quickly securing a deal with Washington, while France has taken a more hardline approach.
According to Barclays, the most likely outcome is an average U.S. tariff of about 15% on EU exports, with the current pause extended beyond the July 9 deadline to allow more time for negotiation.
They also expect U.S. tariffs on pharmaceutical and semiconductor imports to rise to 25%.
Barclays pointed out that a more favorable outcome could involve lower-than-expected tariffs — possibly through quotas or reduced sector-specific rates, especially since some sectors like pharmaceuticals currently face no duties.
However, the worst-case scenario would see the talks break down, prompting the U.S. to impose tariffs higher than 10%, at least temporarily.
