Donald Trump threatens the EU with tariffs, the EU prefers negotiations, however is prepared for a commerce battle | Credit score: Tomas Ragina/Shutterstock
Donald Trump has lit the fuse on what could possibly be a brand new transatlantic commerce battle—this time with a 17% tariff bomb aimed squarely at Europe’s cherished meals and farm exports. The risk landed arduous in Brussels after EU Commerce Commissioner Maroš Šefčovič obtained the warning in individual throughout talks in Washington this week.
Amongst these on the desk: Trump’s financial lieutenants, Treasury Secretary Scott Bessent, Commerce Consultant Jamieson Greer, and Commerce Secretary Howard Lutnick. In accordance with a number of sources, Trump intends to ship formal letters to a dozen international locations warning of everlasting tariffs reaching as much as 70% except they attain a deal by his self-imposed July 9 deadline.
“They’ll vary in worth from possibly 60, or 70 per cent to 10 and 20 per cent, however they [the letters] are going to be beginning to exit someday tomorrow,” he instructed reporters, in accordance to the Guardian.
Favour a negotiated answer
For the EU, this implies Belgian chocolate, French cheese, Irish butter, Spanish olive oil and Italian prosciutto may all face a tariff wall at U.S. borders—slashing competitiveness and probably gutting billions from the European agro-export sector.
EU commerce spokesperson Olof Gill stated on Friday night that the EU’s precedence continued to “favour a negotiated answer”.Gill additionally stated, “progress was made in the direction of an settlement in precept through the newest spherical of negotiations which befell this week” and negotiations would proceed “on substance over the weekend”.
Nonetheless, the EU additionally made clear it’s ready for a possible commerce battle with retaliatory tariffs on every part from Bourbon to Boeing 747s if Trump walks away earlier than Wednesday, the Guardian famous.
Time is operating out
On Thursday, European Fee President Ursula von der Leyen confirmed that the EU was looking for a high-level framework deal, stating that it might be too troublesome to attain a complete settlement inside the accessible time.
The EU can be looking for speedy reduction from tariffs in key sectors as a part of the framework, together with the auto business, which has to cope with a 27.5 per cent tariff, up from 2.5 per cent earlier than Trump began his commerce aggression.
“What we’re aiming at is an settlement in precept,” Von der Leyen stated in Denmark. “That can be what the UK did.”
The 90-day pause on Trump’s “liberation tariffs” ends on Wednesday for greater than 60 international locations along with the EU, which was extra not too long ago threatened with a 50 per cent tariff.
EU is prepared for a commerce battle
If the U.S. goes by with its risk, the EU received’t blink. “All devices are on the desk,” the EC president stated, echoing a rising temper in Europe that this time, the bloc won’t fold below stress.
What’s holding up a deal isn’t simply {dollars} and cents—it’s ideology. The U.S. and EU are now not talking the identical commerce language.
Trump’s administration sees negotiations as a zero-sum sport—concessions demanded, not exchanged. Brussels, in distinction, stays rooted within the precept of reciprocity: you give, we give. That mismatch has made progress glacial. Even a restricted framework deal—a political assertion with no binding particulars—is proving elusive with simply hours left on the clock.
Large Tech, huge issues
One of many key fractures lies in digital regulation. Europe has develop into the worldwide benchmark for reining in Large Tech, from knowledge privateness to algorithm transparency. The U.S. sees these guidelines—significantly when utilized to Silicon Valley giants—as focused commerce restrictions.
“Trump’s workforce needs the EU to intestine its digital guidelines as the worth for a deal,” stated Alberto Rizzi of the European Council on Overseas Relations. “However that will fly within the face of Europe’s authorized structure and democratic commitments.”
The message from Brussels is obvious: regulating digital platforms isn’t up for negotiation.
Taxation: A pink line
One other level of rivalry is VAT. Trump has lengthy framed Europe’s value-added tax system as a hidden tariff on American items, though VAT is levied equally on home and overseas merchandise. Nonetheless, Trump insists it places U.S. firms at a drawback.
European officers see this as one more distortion—and one which undermines any rational negotiation. “Taxation is a nationwide matter. Full cease,” stated one senior EU diplomat. “It’s not even on the desk.”
When worldviews collide
Extra broadly, the talks are hindered by a complete lack of belief. Trump’s view is transactional: Allies should pay their dues or face the results. Europe, in the meantime, insists on multilateralism and rules-based commerce. The 2 sides are primarily negotiating in numerous universes.
“This administration sees talks by a lens of leverage,” stated Philip Luck of the Centre for Strategic and Worldwide Research. “They don’t imagine in mutual profit—they need capitulation.”
Trump’s pushback in opposition to the EU’s provide of zero-for-zero tariffs—primarily a truce in change without spending a dime commerce—has solely deepened the divide.
Ticking clock, rising stakes
Whereas each side declare they need to keep away from escalation, few imagine a significant deal is inside attain. “I’m very sceptical,” stated Jacob Kirkegaard of the Peterson Institute. “The EU will retaliate. After which we’ll enter a spiral—retaliation after retaliation—till the financial ache forces somebody to blink.”
Von der Leyen and Šefčovič insist they’re nonetheless working towards a “good and impressive transatlantic commerce deal.” However off-record, EU officers admit they’re bracing for the worst.
One diplomat summed it up bluntly: “Trump needs to play hardball? Positive. However Europe isn’t bringing a baguette to a gunfight.”