US President Donald Trump on Friday threatened a 50% tariff on goods from the European Union starting Jun 1, citing a lack of progress in current trade negotiations.
“Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable,” he wrote in a Truth Social post Friday morning.
“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50 percent Tariff on the European Union, starting on June 1, 2025,” he wrote.
The new threat came hours before a call between EU Trade Commissioner Maros Sefcovic and US Trade Representative Jamieson Greer to seek a basis for negotiation to head off a transatlantic trade war.
The call takes place just days after Brussels responded to the Trump administration with a new list of concessions it is willing to offer under efforts to reach a similar deal on trade like China and the UK.
Following a tense standoff, Washington and Beijing reached a temporary dealtwo weeks ago, slashing punitive tariffs from over 100% to more sustainable levels. As negotiations for a long-term deal intensify, for the next 90 days Chinese goods entering the US will incur a 30% tariff, while exports from the US to China will face a 10% levy.
Days earlier, Trump secured the first outline of a trade deal since proclaiming April 2 as “Liberation Day,” when he announced stiff worldwide tariffs. The broad pact with the United Kingdom reduces tariffs on British carmakers exporting to the US and grants American exporters, including farmers and ethanol producers, enhanced access to the UK market.
EU trade deal ‘harder to reach’
While Trump continues to play hardball with Brussels, claiming in his post that the EU was “formed with the primary purpose of taking advantage of the United States,” Andrew Kenningham, chief Europe economist for the London-based Capital Economics research house, thinks economic pressures will prevent him from pushing Brussels too far.
“The two new deals will make EU negotiators more confident that they can stick broadly to the policy already set out, which is to try to avoid escalation, threaten some retaliation but with a delay, while at the same time be willing to negotiate,” Kenningham told DW.
Even so, Capital Economics warned in a research note that an EU-US deal “appears harder to reach,” pointing to the bloc’s large goods trade surplus with the US and the challenge of reaching consensus among the 27 EU member states.
The EU has already threatened new tariffs on €95 billion ($107 billion) of US goods in response to Trump’s earlier tariffs on aluminum, steel and European automakers, but paused them to allow negotiations to proceed. Brussels is also considering curbs on scrap steel and chemical exports to the US.
EU offer seemingly not enough
Claudia Schmucker, head of the Center for Geopolitics, Geoeconomics, and Technology at the German Council on Foreign Relations, doesn’t think the China and UK deals really “change anything.”
“Trump is still expecting that the EU will offer something he feels is valuable enough,” Schmucker told DW, adding that the president’s demands from Europe remain a “mystery,” but are likely to include more agriculture and energy imports.
Olof Gill, a spokesperson for the European Commission, declined to comment immediately after Trump’s new tariffs threat, saying he was waiting until after the call between Sefcovic and Greer, reportedly scheduled for later on Friday.
The Financial Times reported earlier on Friday, that Greer is likely to reject the EU’s new list of proposals, demanding unilateral concessions instead of mutually reducing tariffs.
The new EU proposal reportedly seeks to boost EU purchases in strategic sectors, such as energy, as well as developing cooperation on 5G and 6G mobile networks. It would also ramp up strategic cooperation in sensitive sectors that have undergone trade investigations resulting in US tariffs, such as steel and aluminum, semiconductors and cars.
The EU offer also includes more imports of nonsensitive agricultural goods.
Last year, the US had a $235.6 billion (€210 billion) trade deficit in goods with the EU, a 12.9% increase on the previous year, according to the Office of the US Trade Representative. The latest 2023 data from Eurostat, the EU’s statistics agency, puts the EU goods surplus at €157 billion.
Claudia Schmucker thinks the president’s negative rhetoric, plays into Brussels’ hands as it tries to reach consensus on how to proceed, even as Hungary, Italy and some others push for bilateral deals.
“Even though some EU states are not fully on board with Brussels’ negotiating position, Trump’s antagonism is enough to help boost EU unity,” she said.
EU: A key market for US services exports
Miguel Otero, senior fellow for international political economy at Spain’s Elcano Royal Institute, believes the US “has a lot to lose” from any Trump misstep.
“The EU has a big deficit when it comes to services, especially financial and digital services and entertainment platforms,” Otero told DW. “The US cannot afford to lose the European market. If we act as a single entity, then the EU has as much leverage as China.”
Although the EU has a significant goods surplus with the US, with a fifth of EU goods crossing the Atlantic last year, the bloc also accounts for 25% of US services exports, worth $275 billion in 2024. Including Switzerland and the UK, 42% of US services exports are sent to the European market.
The European Commission, the bloc’s executive arm, has vowed to launch a dispute at the World Trade Organization (WTO) against Trump’s “reciprocal” tariffs and levies on cars and auto parts.
Higher tariff deadline approaches
As the July 8 deadline for the 90-day pause on “reciprocal” tariffs on the EU approaches, the window for a deal is narrowing even more after Trump’s latest tariffs announcement.
Capital Economics predicts Trump may push negotiations to the brink, maintaining pressure on trading partners.
German Economy Minister Katherina Reiche, however, struck a more optimistic tone last week, emphasizing the US’ vital role as a trade partner for the EU.
“We negotiate from a position of economic strength … but one that must be wielded carefully,” Reiche said. “A solution is essential, as escalation will leave no winners.”
This article was first published on May 16, and updated on May 23 to include Donald Trump’s latest tariff announcement.
Edited by: Ashutosh Pandey
