Investing.com -- The European Union (EU) is working on potential concessions to the Trump administration in an attempt to mitigate the impact of US tariffs on the bloc’s exports, according to a report from Bloomberg News, citing people familiar with the talks.

EU officials, following meetings in Washington this week, were informed that there was no way to circumvent the upcoming auto and reciprocal tariffs that the Trump administration plans to implement next week. Concurrently, discussions were initiated on what a potential deal to reduce these tariffs might look like.

This has led the European Commission, which manages trade matters for the EU, to start developing a "term sheet" for a potential agreement. This document would outline areas for negotiations on the punitive trade measures. These areas include reducing its own duties, fostering mutual investments with the US, and easing particular regulations and standards, according to anonymous sources.

The reciprocal tariffs are designed to counteract what Trump perceives as unfair levies on US goods, as well as non-tariff barriers. These non-tariff barriers include domestic regulations and methods of tax collection, such as the EU’s value-added tax (VAT), digital taxes, and regulations. The EU maintains that its VAT is a fair, non-discriminatory tax that applies equally to domestic and imported goods.

This term sheet would serve as the foundation for the commission to engage in talks with the US after the reciprocal duties take effect.

These tariffs are likely to impact all or most goods being exported from the EU to the US. The US has not yet specified the tariff level it will apply to the EU, but officials in the bloc anticipate a rate between 10% and 25%. The sources added that any future deal would be challenging and would not restore the status quo.

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