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An emboldened China eyes more concessions from US at Stockholm trade talks

(Bloomberg) -- The European Union and the US appear to differ on some fundamental details in their new trade agreement, underscoring the difficulty they’ll have in turning this deal into a reality.

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The EU said it would accept a 15% tariff on nearly all its exports to the US. President Donald Trump told reporters that the bloc also agreed to open up its “countries to trade at zero tariff.”

After he met with European Commission President Ursula von der Leyen Sunday, Trump said that the deal would not include pharmaceuticals, a contentious point in the negotiations, seeming to imply they would be subject to a higher tariff.

In a separate news conference, von der Leyen said, “The EU agreed we have 15% for pharmaceuticals.” But she added, “Whatever decisions later – by the president of the US – that’s on a different sheet of paper.”

The US has initiated investigations into whether the import of certain products, such as pharmaceuticals and semiconductors, poses a national security threat to the country. This could lead to separate tariffs on those sectors.

Trade accords typically require years of negotiations and can run thousands of pages long. Talks on the preliminary agreement clinched on Sunday began in April and concrete details appear scant.

The EU and US also diverged on another controversial sector, with Trump saying that the 50% tariff on steel and aluminum “stays the way it is.” Von der Leyen said that metal “tariffs will be cut and a quota system will be put in place.”

Von der Leyen argued that she won certainty and stability for companies on both sides of the Atlantic. But it’s far from clear that the EU and US will be able to iron out all their differences on the many contentious issues yet to deal with.

“The focus will now turn to interpretation and implementation risk, posing a mix of political and technical questions,” Carsten Nickel, deputy director of research at Teneo, wrote in a note. “Given the nature of the deal, major uncertainties are likely to persist.”