U.S. Secretary of Commerce: There is still a lot of "bargaining" with the European Union, and digital services tax and steel and aluminum will be the focus of negotiations

The latest statement from U.S. Secretary of Commerce Gina Raimondo indicates that negotiations for the U.S.-EU trade agreement are not yet over. After reaching a preliminary framework agreement, extensive negotiations are still needed in several key areas, including the digital services tax and steel and aluminum trade.

According to Xinhua News Agency, on July 27, local time in Scotland, U.S. President Donald Trump and European Commission President Ursula von der Leyen jointly announced a new trade agreement between the U.S. and the EU, under which the U.S. will impose a 15% tariff on products imported from the EU. The EU will increase investments in the U.S. by $600 billion and purchase $750 billion worth of U.S. energy and other goods.

On July 29, Tuesday, Eastern Time, Raimondo revealed to the media that she had a phone call with EU officials that morning to discuss the future negotiation agenda. The EU's digital services tax policy targeting U.S. tech companies will be a key focus of the negotiations, and the trade of steel and aluminum products not included in the current agreement will also be a topic of discussion.

This statement indicates that despite the framework agreement reached by Trump and von der Leyen over the weekend, there are still uncertainties in several key areas. These unresolved issues may affect investors' confidence in the stability of U.S.-EU trade relations.

U.S. and EU to Discuss Digital Services Tax and Steel and Aluminum Trade Issues

In an interview with the media, Raimondo candidly stated, "There is still a lot of bargaining work to be done." She expects to continue communicating with EU trade officials to explore issues such as the digital services tax. Raimondo said:

"Do I expect to continue communicating with the trade officials of the European Commission? Yes, they called me this morning to discuss what else needs to be talked about, such as digital services, taxes, and the attacks on our (U.S.) tech companies—these will all be put on the table for discussion."

Additionally, Raimondo indicated that the EU hopes to include steel and aluminum in the discussion. These products are currently not covered by the agreement.

On Tuesday, another media outlet reported that an EU official revealed that the EU is pushing to establish a quota system for exported metal products to reduce U.S. tariffs on specific quantities of EU metal products. Currently, EU metal exports face a high tariff of 50%.

Pharmaceuticals and Automotive Industries are Key to the Agreement

Raimondo pointed out in the interview that the pharmaceutical and automotive industries are key areas for reaching a trade agreement with the EU. "The reason the Europeans are reaching an agreement is primarily due to automobiles and pharmaceuticals," she explained.

Regarding the pharmaceutical industry, Raimondo stated that the Trump administration will announce tariff policies on pharmaceuticals in the next two weeks, imposing "massive" tariffs on drugs not produced in the U.S. She said:

"If you don't produce drugs in the U.S., you will pay a massive tariff. ... Since we are paying for your drugs, you should produce them in the U.S."

U.S. and EU Seek to Finalize Joint Statement Before August 1 to Clarify Parts of the Agreement

On Tuesday, media reports cited EU senior officials stating that both sides are currently seeking to finalize a non-legally binding joint statement before August 1 to further clarify parts of the agreement reached during last weekend's negotiations. Once the statement is finalized, the U.S. will begin to reduce tariffs on specific industries in the EU According to CCTV News, Ursula von der Leyen stated last Sunday that under the current circumstances, a tariff level of 15% is the best outcome the European Commission can achieve. She confirmed that the tariffs for the automotive industry in the agreement are uniformly set at 15%. She also confirmed that the EU and the US have reached an agreement in the pharmaceutical sector to implement a uniform tariff rate of 15%. She acknowledged that the EU and the US have not yet made a decision regarding the spirits sector, and the details of the trade agreement framework signed that day will be announced in the coming weeks.

CCTV mentioned that while explaining some decisions in the trade negotiations, von der Leyen stated that the EU is still overly reliant on Russian liquefied natural gas, thus importing more affordable liquefied natural gas from the US is very welcome.

However, the market is skeptical about whether the EU can fulfill its commitment to purchase $750 billion worth of US energy within three years. Last year, the EU imported less than $80 billion in energy from the US, and achieving the new target will face significant challenges.

Complete Setting of Global Equivalent Tariffs by August 1

Lutnik confirmed on Tuesday that August 1 is the date set by the Trump administration for establishing all equivalent tariffs, "after which formal implementation will begin."

He pointed out that the US and China, which are currently in talks, have different timelines, and for other countries, the US will complete the setting of equivalent tariffs before Friday, August 1.

"We have our own team working with China. They have their own matters. But for the rest of the world, we will complete all work before Friday."

According to Xinhua News Agency, from July 28 to 29 local time, the Chinese lead in the China-US economic and trade talks, Vice Premier He Lifeng, met with the US leads, Treasury Secretary Becerra and Trade Representative Tai, in Stockholm, Sweden. According to the consensus reached in the talks, both sides will continue to promote the suspended 24% portion of the US equivalent tariffs and the Chinese countermeasures for a 90-day extension as scheduled.

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