The US President, Donald Trump, has escalated trade tensions with the European Union (EU), triggering fears of a trade war that could roil global markets.
On Friday, Trump threatened to impose a 50% tariff on all goods coming from the EU, citing lack of progress in the trade talks with Brussels. The US President’s remarks prompted the block to vow revenge if Trump moved on with his threats.
New EU Tariff
Trump expressed frustration with trade negotiations with the EU, describing the bloc as “very difficult to deal with.” He further said that the EU’s “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 US of more than $250,000,000 a year, a number which is totally unacceptable.”
The US President cited lack of progress in the trade talks. “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025,” Trump announced on Truth Social. He added that products built or manufactured in the US will not be subject to tariffs.
Threat Escalation
Later Friday, Trump told reporters at the White House that he would implement the tariffs as planned. “I’m not looking for a deal – we’ve set the deal, it’s at 50%,” he said, according to CNN. However, Trump suggested that a big EU investment in the US might make him consider a delay. “If somebody comes in and wants to build a plant here, I can talk to them about a little bit of a delay,” he noted.
According to the US government figures, cited by The Guardian, the EU is one of the US’ largest trading partners, exporting goods worth more than $600 billion in 2024 and importing US goods worth $370 billion.
Trump’s Tariffs War
On April 2, 2025, Trump sparked a trade war, announcing sweeping tariffs on all imports to the US, with the EU facing a 20% tariff on all goods. In response, the bloc imposed 25% tariffs on a range of US products worth around $23 billion.
The US President decided later to halve the tariffs, keeping in place 25% import taxes on steel, aluminum and vehicle parts. The EU also announced a pause on its retaliatory tariffs to allow for trade negotiations, set to expire on July 9.
Following Trump’s post on Truth Social, the US Treasury Secretary, Scott Bessent, told Fox News that “EU proposals have not been of the same quality that we’ve seen from our other important trading partners.” He expressed his hope that Trump’s announcement “would light a fire under the EU,” adding that the bloc has what he called a “collective action problem.”
EU Response
Several European politicians were frustrated with Trump’s announcement. The EU Trade Commissioner, Maroš Šefčovič, said that the EU is committed to a trade deal that works for both sides.
“The European Commission is ready to work in good faith. EU-US trade is unmatched and must be guided by mutual respect, not threats. We stand ready to defend our interests,” he posted on X following a call with the US Trade Representative, Jamieson Greer, and Commerce Secretary, Howard Lutnik.
The Irish Prime Minister, Micheál Martin, said that Trump’s threat was “extremely disappointing,” warning that tariffs would be damaging to both sides. “We do not need to go down this road. Negotiations are the best and only sustainable way forward,” he posted on X.
Similarly, the French Trade Minister, Laurent Saint-Martin, said that Trump’s threats were not helping the negotiations between the EU and the US. “We are maintaining the same line: de-escalation, but we are ready to respond,” he wrote on X.
Meanwhile, the German MEP, Bernd Lange, who is also head of the EU’s trade committee, threatened counter-tariffs against the US. “We will not allow ourselves to be pressured and will objectively attempt to begin negotiations next week,” he was quoted by the German Die Welt newspaper.
Lange added that in case of negotiations failure, the EU is strong enough to implement countermeasures, such as counter-tariffs, to offset the economic damage.”
Backup Plan
Earlier in May, the EU reviewed a retaliatory plan, worth around $108 billion, should the trade talks go unsuccessful. The plan covered “a broad range of industrial and agricultural products,” according to a statement by the European Commission.
In a separate statement on May 8, the European Commission President, Ursula von der Leyen, said that the bloc made a “zero-for-zero” tariff offer, “but if and where negotiations fail, we also will act,” she added. The European Commission President warned that “all instruments, all options stay on the table.”
