The European Union dominates critical pharmaceutical imports into the United States, making the 30% tariffs Trump threatened to go into effect Aug. 1 particularly risky.

The European Union and the U.S. are heading for a potential trade deal that includes 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 securing another major trade agreement hours after he unveiled one with Japan.

The euro crept toward its highest level in nearly four years on Thursday while the yen held to gains following more progress on trade deals between the United States and its largest trading partners,

A deal with Japan and a potential deal with Europe follows months of uncertainty and will likely raise prices while offering a bit of clarity for global trade.

Analysts see a potential path for other trading partners, including South Korea and the European Union, to strike their own deals.

July 23 (Reuters) - The S&P 500 notched a record high close on Wednesday, lifted by Nvidia and GE Vernova, as the European Union and the U.S. appeared headed toward a trade deal similar to an agreement U.S. President Donald Trump struck with Japan.

The European Union and Japan will work more closely to counter economic coercion and address unfair trade practices, European Commission President Ursula von der Leyen told reporters on Wednesday.

The European Union will merge two packages of potential tariffs against the U.S. so that both are ready to take effect in early August if no deal has been reached with the Trump administration. The combined list will need approval from EU member states and could take effect as soon as Aug.