The United States and the European Union are locked in frantic negotiations over a high-level “framework” trade deal aimed at averting sweeping 50% tariffs that President Donald Trump has vowed to impose on all EU exports starting July 9.

The rush to secure a last-minute accord comes as Trump ruled out granting any deadline extensions, signaling a hardline approach similar to what Japan now faces.

The talks, which are taking place in Washington, have intensified as both sides scramble to avoid a transatlantic economic standoff that could severely impact key industries such as automotive, steel, agriculture, and pharmaceuticals. Diplomats say the EU is prepared to accept a 10% blanket tariff on exports to the US as a compromise—provided Washington suspends the harsher duties and offers leeway on sector-specific items like the 25% car tariff that has already hit German manufacturers hard.

According to sources close to the negotiations, the framework being discussed would be modeled on recent “agreement in principle” pacts Trump signed with the UK and Vietnam. It would not be a comprehensive trade deal, but rather a political understanding that freezes further tariff escalation while opening room for deeper discussions over several months.

European Commission President Ursula von der Leyen, speaking in Brussels on Thursday, acknowledged the limits of what could be achieved before next week’s deadline.

“Indeed, what we are aiming at is an agreement in principle, because with such a volume, in 90 days, an agreement in detail is impossible… That is also what the UK did.”

Negotiators on the US side include Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer. Greer is expected to continue working through the weekend in a last-ditch effort to finalize the deal. The EU’s delegation is led by Trade Commissioner Maroš Šef?ovi?.

Sources familiar with the meetings say the EU has pushed for a “standstill clause” that would block any new tariffs during an extended negotiation window—something seen as crucial for German carmakers and other sectors vulnerable to the threatened 50% levies.

The urgency comes against a backdrop of Trump’s “Liberation Day” tariffs imposed on April 2, which targeted more than 60 countries. The move was part of a dramatic reshaping of US trade policy, with Trump declaring the need to “rebalance trade fairness” through hardline measures. Although he granted a 90-day pause for some countries, that reprieve ends Tuesday—and he has made clear there will be no more extensions.

Asked directly whether Japan or the EU would get extra time, Trump said flatly, “No. I’m not thinking about the pause. I’ll write letters to a lot of countries.” Tokyo, which has been unable to reach a deal, is now bracing for the re-imposition of 30–35% tariffs on cars and rice exports. EU negotiators are determined to avoid the same fate.

“This is not about a minutely detailed trade deal,” said German Chancellor Friedrich Merz in Berlin. “It’s about the quick resolution of a tariff dispute.” Merz has reportedly played a key role in persuading von der Leyen and others within the Commission to pivot toward the more flexible UK-style framework.

One EU source revealed that during talks in April, the bloc was handed what they described as a “massive tome” listing US trade grievances country by country—over 30 pages dedicated to the EU alone. In a recent briefing to EU ambassadors, von der Leyen’s chief of staff and the Commission’s trade director outlined four US priorities: tariff policy, economic purchases (like oil and gas), regulation of strategic sectors (such as pharma and semiconductors), and non-trade barriers including tech, food, and car standards—all of which remain red lines for Brussels.

Crucially, the latest US proposal, sent to EU leaders last Wednesday, contained no reciprocal concessions. That has frustrated EU diplomats, but many acknowledge that even a symbolic agreement would be preferable to a tariff shock next week.

A failure to reach a deal would see all EU goods subjected to a 50% blanket tariff—up from the current 10%, which already includes special levies like the 25% car tax and 50% duties on steel and aluminum. Such a move could devastate German auto exports and deepen global economic uncertainty, particularly as similar threats hang over other key US trade partners including Canada, Mexico, and South Korea.

Despite the EU’s resistance to US demands for deeper regulatory alignment in areas such as food safety and car emissions, negotiators hope to carve out enough progress for Trump to claim victory—possibly in time for a symbolic announcement on July 4, Independence Day.

Trump’s aggressive tariff policy has sparked trade tensions not just with the EU but across the globe. While he claims to have struck deals with China and Vietnam, only the UK has so far signed a formal pact. Talks with Canada, India, and South Korea remain in flux.

Yet Trump’s refusal to extend the July 9 deadline is being interpreted as a show of strength—and a signal that even traditional allies won’t be spared without concrete concessions.

The US and EU are on the brink of a major tariff escalation that could trigger a full-blown trade conflict if no deal is reached by July 9. With no extension in sight, and talks stretching through the weekend, the next 96 hours may determine the trajectory of transatlantic trade for years to come.

If a framework is secured, it will serve not just as a ceasefire, but as a face-saving mechanism for both sides—especially Trump, who may use it as a patriotic showpiece during Independence Day celebrations. But if negotiations falter, businesses on both sides of the Atlantic could soon find themselves on the frontline of a trade war neither economy can afford.