By Anita Hamilton and Brian Swint

The U.S. has a fifty-fifty chance of striking a deal with the European Union that will result in lower tariff rates on imports, President Donald Trump told reporters Friday.

"It will be a deal where they'll have to buy down their tariffs," he said as he departed the White House on his way to Scotland where he will meet with United Kingdom Prime Minister Keir Starmer and visit his new golf course in Aberdeenshire.

"I think the EU has a pretty good chance of making a deal," he added.

The 27-country bloc faces a tariff rate of 30% on imports to the U.S. if no deal is struck by next Friday. The EU is also planning to raise levies on imports from the U.S. if a pact isn't made.

Trump said Thursday that Japan bought down the 25% tariff rate set to go into effect Aug. 1 to 15% in part by committing to investing $550 billion in U.S. industries, with most of the profits going to the U.S. He suggested that others, including the EU, could strike similar deals.

'Confines of a Deal With China'

As for deals with other nations, Trump said, "We have the confines of a deal with China. Don't have a deal with Canada." Nearly 200 other countries will be getting letters stating their new tariff rates next week.

Digital Services Taxes

When asked if there was any wiggle room on digital services taxes in exchange for steel and aluminum tariffs, Trump said, "Not a lot because if I do it for one, I have to do it for everyone."

Steel and aluminum imports to the U.S. are currently tariffed at 50% but the U.K. has a special carve-out where it only pays 25% for now.

Tariff Impact on Corporate Earnings

The impact of tariffs is showing up in companies' second-quarter earnings reports, though it isn't as bad as feared.

The taxes on imports are still set to raise companies' costs and weigh on profits. Evidence so far suggests that it is American corporations that are paying for the tariffs most, rather than foreign firms or U.S. consumers. That may change in the future if companies raise prices to pass on the costs. With the Aug. 1 deadline for trade deals with partners approaching next week, broad rates look likely to be higher than they were in the second quarter.

But investors have been pleasantly surprised at the relatively small effects of the tariffs so far.

Deckers Outdoor, the maker of Ugg and Hoka shoes, declined to give guidance for more than the current quarter because of trade uncertainty. But the guidance it did give wasn't bad -- it sees earnings per share rising to $1.50 to $1.55 from $0.93 last quarter. The stock jumped 16% when the market opened Friday.

Boston Beer, the maker of Sam Adams, said that the tariffs would cost the company between $15 million and $20 million for the full year. That is a lot, but less than the $30 million it had reckoned with before. Its shares spiked 11% in early trading.

Chip maker Intel said its results were helped by lower tariffs than feared. The company still has problems -- it's laying off about 15% of its workforce, and its shares were slipping 8.1% Friday morning -- but tariffs aren't one of the bigger ones.

A week from today, tariff rates are set to revert to higher ones for countries that haven't yet secured a deal. After getting to an agreement with Japan earlier this week, a pact with the European Union, the biggest U.S. trading partner, and India are expected to be announced soon.

Write to Anita Hamilton at anita.hamilton@barrons.com and Brian Swint at brian.swint@barrons.com

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July 25, 2025 11:02 ET (15:02 GMT)

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