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 S&P 500 index notched its third consecutive record high Wednesday, with a U.S.-Japan tariff deal and signs of progress with other trade partners lifting the Dow Jones Industrial Average more than 500 points.