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.

The 15% tax is a meaningful drop from the 25% rate that Trump, in a recent letter to Japanese Prime Minister Shigeru Ishiba, said would be levied starting Aug. 1.