Report: The US and Europe are about to reach an agreement on "non-tariff trade disputes."

The United States and the European Union are nearing an agreement on several non-tariff trade disputes, covering a wide range of topics from deforestation rules to the treatment of American tech companies in Europe, but the outlook for the tariffs that both sides are about to implement remains unclear. On June 20, the Wall Street Journal reported that a draft of a "reciprocal trade agreement" circulated by the Office of the United States Trade Representative shows that the two sides have reached a preliminary agreement on specific trade issues such as the EU's Digital Markets Act, carbon border tariffs, and the shipbuilding industry. Insiders indicated that the agreement seems close to finalization but emphasized that changes may still occur in the coming days and weeks. An EU spokesperson stated that both sides are "engaging in comprehensive and in-depth negotiations," and that "reaching a mutually beneficial solution through negotiations remains our preferred outcome." However, the draft does not specifically address any tariff measures threatened or already imposed by Trump on the EU, including the previously suspended 20% "reciprocal tariff" and higher tariffs on specific industries such as automobiles and steel. The draft also does not detail the retaliatory tariffs that the EU plans to implement on July 14. Reports indicate that the absence of tariff issues in the draft adds uncertainty to the prospects of the agreement. It remains unclear whether tariff issues will be resolved in a separate agreement, whether related negotiations have stalled, or whether both sides will extend negotiations beyond Trump's July 9 tariff deadline. Significant Concessions in Tech Regulation Although tariffs are not addressed, the draft agreement covers several economic pain points that American companies have long faced. According to the draft agreement, the U.S. and EU will engage in dialogue regarding the implementation of the EU's Digital Markets Act and will exempt U.S. companies from enforcement actions during the negotiations. The EU has previously fined two American companies—Apple and Meta Platforms—under the Digital Markets Act. Reports indicate that since American companies operate most of the platforms regulated by the Digital Markets Act, exempting U.S. companies will significantly weaken the effectiveness of this landmark EU digital law. Strengthened Coordination on Environmental Policies and Expanded Industrial Cooperation The draft agreement also includes several measures for coordinating environmental policies. The EU has postponed the implementation of forest deforestation regulations by one year, although this timing adjustment does not seem to be a new initiative. It is reported that the EU decided to delay the forest deforestation rules at the end of last year because companies within Europe and other regions indicated they needed more time to comply. Regarding the carbon border adjustment mechanism, the U.S. and EU will coordinate the design and implementation of this tariff reflecting the carbon intensity of imported goods, with U.S. products receiving a one-year exemption after the policy is implemented. Additionally, U.S. energy exports to Europe will also be exempt from EU methane regulations. The draft agreement also shows that the EU will consider measures to encourage the development of shipbuilding and shipping industries from market economies. The U.S. and EU will also enhance coordinated cooperation in areas such as defense procurement and critical minerals