With no guarantee of an EU-U.S. trade deal, Europe keeps its options open

A trade agreement between the European Union and U.S. could be imminent, however with no guarantees Brussels continues to prepare retaliatory measures.

A 15% baseline tariff rate, which includes an around 4.8% duty currently in place, is currently the base-case scenario for EU imports to the U.S., an EU diplomat told CNBC on Wednesday. However, there could also be some exemptions that are still being worked out, they added.

The EU may in turn reduce its own levies on the U.S., according to the diplomat.

Negotiations between the U.S. and EU have been tough going with pressure mounting ahead of the Aug. 1 deadline which would see imports from the EU to the U.S. hit with a 30% tariff. While this is lower than the 50% rate Trump had previously threatened, it would likely still heavily impact businesses and economies in both the EU and the U.S.

“Relative to the risk of much higher extra tariffs such as 30% or even 50% that Trump had occasionally muted before, that would be a positive outcome,” Holger Schmieding, chief economist at Berenberg, commented in a note.

But the deal is by no means done yet, with an EU diplomat telling CNBC the “final decision [is] in hands of President Trump.”

A second EU official also appeared hesitant, telling CNBC that media reports that the EU and the U.S. are closing in on a deal are “too optimistic.”

“Contacts between both sides continue, but until President Trump speaks his mind we don’t have anything concrete. Everything still remains in the open,” they said.

Trump’s administration appeared to strike a similar tone Wednesday. When asked about the potential for a 15% tariff rate, White House Deputy Press Secretary Kush Desai said discussions about any potential trade deals should be considered “speculation,” according to a report from Reuters.

Trump is notorious for last minute changes of heart and making quick decisions, the latest example of which took place earlier this week on the U.S.-Japan trade deal. During a meeting between Trump and the Japanese delegation, discrepancies and edits were seen on a card outlining the deal on Trump’s desk, according to a photo posted on X by Dan Scavino, the White House deputy chief of staff.

Despite European markets on Thursday being buoyed by the prospect of a deal, the uncertainty surrounding what a EU-U.S. agreement could look like remains.

In the meantime the EU is still working on countermeasures it could impose if U.S. tariffs do come into effect next week.

Primarily, these are set to include retaliatory tariffs which could come into force just days after the U.S.’ duties. Under the EU’s new plan, previously prepared lists of countermeasures targeting goods, will be combined in one list, totalling 93 billion euros ($109.4 billion).

There has also been widespread talk about the EU deploying its so-called “Anti-Coercion Instrument,” which has been described as the “nuclear option.”

If enforced, U.S. suppliers could face restricted access to the EU market. For example they would be unable to participate in public tenders in the bloc, there could be curbs on exports and imports, and foreign direct investment could be limited.

While France has so far been the only country to call “for immediate establishment of coercion,” if no agreement is struck, “there seems to be a broad qualified majority voting for establishing coercion,” the EU diplomat told CNBC.