The European Union and the U.S. are moving toward a trade deal that could include a 15% U.S. baseline tariff on EU goods and possible exemptions, two European diplomats said on Wednesday, potentially moving President Donald Trump closer to another major trade agreement on the heels of the one he just unveiled with Japan.

Leaders of the European Union and Japan have launched an alliance aimed at boosting economic cooperation, defending free trade and countering unfair trade practices as the two sides face growing challenges from the United States and China.

The EU says its negotiators are working "might and main" on a deal, but the decision rests with US President Trump.

European Commission president Ursula von der Leyen has said she will meet US President Donald Trump on Sunday, raising hopes the two will agree an outline trade deal and avoid a transatlantic trade war.

The economic partnership agreement with Japan has been in force for over five years. At full implementation, the agreement scraps 99% of tariffs for the EU and 97% for Japan. Compared to 2018 (the last year before the agreement), total trade between the EU and Japan grew by close to 20%.

EU And Japan Strike Trade Deal, Call It 'Strong Message To The World' : The Two-Way The European Union and Japan have reached an agreement in principle for a new free trade deal.