EU officials have been in painstaking negotiations with their US counterparts to stop steep levies kicking back in which could wreak havoc on Europe’s economy.

“The faster we can reach the agreement, the better, because that would remove uncertainty surrounding these tariff questions and indeed we see that it is weighing on the economy and also on investment decisions of the companies,” EU economy commissioner Valdis Dombrovskis said in Brussels.

Although Trump on Monday signed an order formally extending a July 9 deadline to August 1, Brussels wants a deal this week.

“We have been working with this ninth of July deadline in mind, but as I outlined, as it seems, the US have now postponed in a sense this deadline to first of August, so that gives us a bit more time, but from our side we remain concentrated,” Dombrovskis added.

The European Commission, conducting trade negotiations on behalf of the 27-country bloc, expects Trump to keep a 10% baseline tariff on EU goods with exemptions for critical sectors like airplanes, spirits and cosmetics, EU diplomats told AFP.

The commission has been pushing for steel tariff exemptions after Trump slapped a 25% levy but the US has refused to budge on the issue.

The agreement would also include a commitment to relocate part of Europe’s car production, especially German, to benefit from tariff exemptions, an EU diplomat said.

If the talks yield no deal, the default US tariff on imports from the EU is expected to double to 20% or even more – Trump having at one point threatened 50%.