July 14, 2025 — The European Union and South Korea are intensifying efforts to secure US trade agreements with the United States ahead of an August 1 deadline, aiming to avoid steep tariffs proposed by former President Donald Trump if he wins re-election. With investors so far downplaying the risks of Trump’s tariff policies,US trade officials are nonetheless racing to lock in exemptions before potential economic disruptions take hold.
EU Pushes US Trade for Negotiated Solution
The EU is prioritizing a negotiated settlement with the US before the August 1 cutoff, fearing that Trump’s proposed 30% global tariff on imports could devastate transatlantic US trade. EU Trade Commissioner Valdis Dombrovskis warned that such a levy would effectively “wipe out trade with the US,” dealing a severe blow to European exporters.
Brussels is seeking a structured agreement that would exempt key EU industries—particularly automotive and green technology sectors—from punitive measures. However, time is running short, and European officials acknowledge that failure to reach a deal could trigger retaliatory measures, escalating into a broader US trade conflict.
South Korea Eyes Preliminary Trade Pact
Meanwhile, South Korea is pushing for an in-principle trade agreement with Washington before the deadline. Seoul, which already has a free trade deal with the US (KORUS), is looking to expand its exemptions, especially for critical exports like semiconductors and electric vehicles.
A South Korean trade ministry official stated that while negotiations are progressing, securing a preliminary understanding by August 1 is crucial to avoid being caught in a wider tariff war. Analysts suggest that South Korea’s existing us trade framework with the US gives it an advantage, but political uncertainties remain a hurdle.
Investors Remain Unfazed—For Now
Despite the looming deadline, financial markets have largely shrugged off Trump’s tariff threats, viewing them as either negotiation tactics or policies that may face legal and political resistance. However, economists caution that if implemented, the tariffs could disrupt global supply chains, particularly in manufacturing and technology sectors.
