Trump Tariffs of 30% Could Devastate EU-US Trade

Donald Trump’s plan to impose tariffs of 30% or more on European imports threatens to hinder transatlantic trade, according to Maroš Šefčovič, the European Union’s trade commissioner. Šefčovič noted that such a move would make it “practically impossible” to maintain current trade levels, which generate €4.4bn (£3.8bn) in daily transactions between the two regions.

Speaking ahead of negotiations with European ministers in Brussels, Šefčovič expressed deep disappointment, remarking that discussions with the United States had been progressing well just weeks before Trump’s surprise announcement. His team believed they were close to finalising an agreement that would have capped duties at 10%. However, Trump’s announcement over the weekend shifted the narrative dramatically.

The US president has declared that the 30% tariff will take effect on 1 August, forcing the EU to reassess its response. As a preliminary measure, the EU postponed a previously planned round of retaliatory tariffs on €21bn worth of US imports, which had been set to begin on Monday. Instead, ministers will explore additional countermeasures targeting €72bn of US goods, although opinions differ over the best course of action.

Lars Løkke Rasmussen, Denmark’s foreign minister and chair of the Brussels meeting, stated that Europe does not wish to trigger a trade war with the US, describing such an outcome as “devastating” for both sides. He added, however, that the EU must demonstrate its economic strength. France has led calls for swifter preparations for countermeasures, suggesting the use of the untested “anti-coercion instrument”, which would allow the EU to impose punitive measures on nations leveraging trade policies as pressure tactics.

Germany has advocated for a more pragmatic approach, urging negotiation rather than provocation. Italy, meanwhile, has warned of the risks a trade conflict poses to stability, while countries from Central and Eastern Europe have cautioned against escalating tensions due to the reliance on American military support in the region. Lithuania’s foreign minister, Keṣtutis Budrys, emphasised the importance of avoiding escalation and highlighted shared challenges, including combating opioid trafficking.

The talks, which had been focused on cooperation, now highlight the fragility and complexities of the EU-US economic relationship. The proposed tariffs, if implemented, could mark a pivotal moment for both economies, with potential repercussions far beyond trade.