Are the US and the EU on track to a trade deal? It seems that positive changes are on the horizon. EU leaders and US President Donald Trump are expected to nail down a trade agreement which sets out import tariffs of no more than 15%.

According to preliminary estimates, this trade deal would resemble the agreement President Trump reached with Japan. Under this scenario, universal tariffs on imported goods would be reduced to 15%. According to the American leader, the deal struck with Tokyo could become “the largest in history,” as the Japanese side has pledged to invest $550 billion in the US economy.

If a trade agreement between the EU and the US is reached in practice, certain types of products, in particular aircraft, strong alcoholic beverages, and medical equipment, will be exempt from tariffs.

However, in case the deal falls through, the European Union may impose retaliatory tariffs of 30%. These would take effect in August and would target American goods worth €100 billion. Besides, Germany and France are proposing to use the so-called Instrument for International Procurement Instrument (IPI)—a mechanism designed to restrict US companies' access to European public procurement markets. The initiative also includes additional trade restrictions.