European Union Commission President Ursula von der Leyen and U.S. President Donald Trump are set to meet this Sunday in Scotland in a decisive attempt to break the months-long trade stalemate.

The United States has threatened to impose tariffs as high as 30 percent on a wide range of European goods if no agreement is reached by August 1, escalating tensions between the two economic powers.

Currently, the EU faces significant tariffs from the U.S., including 25 percent on cars and 50 percent on steel and aluminum. Washington is pushing to reduce its trade deficit and is demanding exemptions for key sectors such as aircraft, pharmaceuticals, lumber, and agriculture.

The European Union, eager to avoid further damage to its economy, has proposed a compromise involving a baseline 15 percent tariff on U.S. goods—similar to the recent agreement with Japan—with carve-outs for critical industries.

Discussions also include allowing a certain quota of steel imports under reduced tariffs, with higher rates applied to imports exceeding the quota.

If no agreement is reached by August 7, the EU plans to retaliate with tariffs on $109 billion worth of American goods, including aircraft and cars, in a move that could escalate the trade war further.

Intense technical and political negotiations have taken place ahead of the summit, with both sides trying to find common ground.

Despite optimistic signals, President Trump has described the likelihood of a deal as “50-50,” acknowledging multiple unresolved issues.

The final decision rests squarely on his shoulders, making this summit a critical moment in shaping the future of transatlantic trade relations and economic stability.