The EU will decide whether to give in to Trump for a quick deal or face the risk of a tariff war with the US.

BRUSSELS, June 26 (Reuters) – European Union leaders are expected to inform the European Commission on Thursday whether they wish to quickly reach a trade agreement with the United States on terms that favor Washington or continue fighting for a more advantageous treaty.

A swift agreement appears to be the preferred option for most, according to officials and diplomats, as it would allow the EU to subsequently seek ways to offset the unfavorable bias through its own rebalancing measures.

"I support the Commission, I support the President of the European Commission in her efforts to advance competitiveness. I also support the European Commission in all its efforts to quickly reach a trade agreement with the US," said German Chancellor Friedrich Merz.

"I want us to make the agreement with the Mercosul "Let's move forward and conclude other trade agreements. Europe faces decisive weeks and months," he added.

The Commission, which negotiates trade agreements on behalf of the EU, will consult with the leaders of the bloc's 27 countries meeting in Brussels on how they should respond to the July 9 deadline set by President Donald Trump to finalize the deal—now less than two weeks away.

The European bloc claims to seek a mutually beneficial understanding, but how Washington While he seems determined to maintain 10% tariffs on most EU products and threatens to raise those rates even further if negotiations drag on, European diplomats say a growing number of countries now prefer a quick solution.

“A trade war impoverishes both sides of the Atlantic and is simply stupid. That is why I support the approach of the Commission President, who has always remained calm and negotiated in search of a result,” stated Belgian Prime Minister Bart De Wever.

"If this results in unilateral and unfair tariffs, then we will have to adopt proportionate and highly targeted countermeasures."

Currently, the bloc already faces US tariffs of 50% on steel and aluminum, 25% on automobiles and auto parts, in addition to the general tariff of 10% on most other European products — a percentage that Trump threatens to raise to 50% if there is no agreement.

To date, the only trade agreement finalized by the United States is with the United Kingdom, maintaining the general tariff of 10%. US officials state that this rate will not be reduced for any trading partner.

Of the 27 heads of government and state, 23 will arrive in Brussels directly from the NATO summit in The Hague. Few will be willing to abandon a military agreement to start an economic war.

"There is a group of EU countries that wants to protect its companies by apparently accepting something they've become accustomed to — a basic tariff of 10%," said a European diplomat.

Rebalancing measures

One of the questions European leaders will face is whether the bloc should respond with its own measures to maintaining this base tariff.

A European Union It has already approved, but not yet imposed, tariffs on €21 billion worth of American products, and is discussing a new package that could affect up to €95 billion in US imports. Some countries in the bloc favor easing these measures.

Among the rebalancing measures under discussion is the taxation of digital advertising, which would affect large US companies such as Google (Alphabet), Meta, Apple, X, and Microsoft, reducing the US trade surplus in services with the EU. In trade in goods, the balance is favorable to the European Union.

The European Commission has proposed a bilateral agreement with the US that would eliminate tariffs on industrial goods, as well as potentially involve additional purchases of liquefied natural gas and soybeans by the Europeans.

Washington, however, has shown little interest so far, preferring to highlight points it considers barriers, such as the European value-added tax (VAT), environmental standards, and rules for digital platforms—points on which the EU does not intend to compromise.

On the sidelines of the summit, EU leaders will also try to alleviate concerns from Slovakia and Hungary about the end of access to Russian gas, as foreseen in the European plan to eliminate all imports of Russian gas by the end of 2027.

According to diplomats from the bloc, the leaders' assurances regarding gas supplies should allow the two countries to approve the 18th package of sanctions against Russia, which they are currently blocking.

Before the summit began, however, Slovak Prime Minister Robert Fico stated that he would demand a postponement of the vote on sanctions until his country's concerns were addressed.

Reporting by Philip Blenkinsop, Jan Strupczewski, Bart H. Meijer, Friederike Heine, Jan Lopatka, Milan Strahm, Andreas Rinke; Writing by Philip Blenkinsop and Matthias Williams; Editing by Raju Gopalakrishnan and Hugh Lawson