EU avoids US tariff letter, eyes concessions, EU sources say

BRUSSELS (Reuters) -The European Union will not receive a letter from the United States setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday, and is eyeing possible exemptions from the U.S. baseline levy of 10%.

U.S. President Donald Trump began informing, in a wave of letters, a range of trading partners from Japan to Myanmar of sharply higher tariffs on goods they sell into the United States starting August 1.

Some EU sources said the bloc was close to an agreement with the Trump administration.

This could involve limited concessions to U.S. baseline tariffs of 10% for aircraft and parts, some medical equipment and spirits in an eventual deal with the Trump administration, three sources familiar with the situation said on Monday.

Two sources also said that the EU was looking into an arrangement that would allow EU automakers that produce and export cars from the United States to import more EU vehicles at tariff rates below the current 25%.

Such an arrangement would benefit German carmakers that have large U.S. plants.

The European Commission, which had aimed for a balanced and broader trade agreement with the United States, briefed EU envoys late on Monday that EU countries faced a choice between accepting an unbalanced deal or facing more uncertainty.

The Commission also said that there were no guarantees that the Trump administration would not impose further tariffs or demand further concessions.

The EU currently faces 50% U.S. tariffs on its steel and aluminium exports, 25% on cars and car parts and 10% on most other products. The U.S. is also looking into further tariffs on pharmaceuticals and semiconductors.

(Reporting by Philip Blenkinsop and Julia Payne; editing by Mark Heinrich and Deepa Babington)