Trump, EU's von der Leyen to meet on Sunday to clinch trade deal

"The question is, do they offer President Trump a good enough deal that is worth it for him to step off of the 30% tariffs that he set," Lutnick said, adding that the EU clearly wanted - and needed - to reach an agreement.

A separate U.S. administration official was upbeat that a deal was possible. "We're cautiously optimistic that there will be a deal reached," the official said, speaking on condition of anonymity. "But it's not over till it's over."

The EU deal would be a huge prize, given that the U.S. and EU are each other's largest trading partners by far and account for a third of global trade.

Ambassadors of EU governments, on a weekend trip to Greenland organised by the Danish presidency of the EU, held a teleconference with EU Commission officials on Sunday to agree on the amount of leeway von der Leyen would have.

In case there is no deal and the U.S. imposes 30% tariffs from August 1, the EU has prepared counter-tariffs on 93 billion euros ($109 billion) of U.S. goods.

EU diplomats have said a deal would likely include a broad 15% tariff on EU goods imported into the U.S., mirroring the U.S.-Japan trade deal, along with a 50% tariff on European steel and aluminium for which there could be export quotas.

EU officials are hopeful that a 15% baseline tariff would also apply to cars, replacing the current 27.5% auto tariff.

POSSIBLE EXEMPTIONS

Some expect the 27-nation bloc may be able to secure exemptions from the 15% baseline tariff for its aerospace industry and for spirits, though probably not for wine.

The EU could also pledge to buy more liquefied natural gas from the U.S., a long-standing offer, and boost investment in the United States.

Trump told reporters there was "not a lot" of wiggle room on the 50% tariffs that the U.S. has on steel and aluminium imports, adding, "because if I do it for one, I have to do it for all."

The U.S. president, in Scotland for a few days of golfing and bilateral meetings, told reporters upon his arrival on Friday evening that von der Leyen was a highly respected leader and he was looking forward to meeting with her.

He said there was a 50-50 chance that the two sides could reach a framework trade pact, adding that Brussels wanted to "make a deal very badly".

The EU now faces U.S. tariffs on more than 70% of its exports, with 50% on steel and aluminium, an extra 25% on cars and car parts on top of the existing 2.5% and a 10% levy on most other EU goods. EU officials have said a "no-deal" tariff rate of 30% would wipe out whole chunks of transatlantic commerce.

A 15% tariff on most EU goods would remove uncertainty but would be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal on all industrial goods.

Seeking to learn from Japan, which secured a 15% baseline tariff with the U.S. in a deal earlier this week, EU negotiators spoke to their Japanese counterparts in preparation for Sunday's meeting.

For Trump, aiming to reorder the global economy and reduce decades-old U.S. trade deficits, a deal with the EU would be the biggest trade agreement, surpassing the $550 billion deal with Japan.

So far, he has reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of "90 deals in 90 days."