The European Union mentioned on Saturday (July 12, 2025) it was able to retaliate to defend its pursuits if america pressed forward with imposing a 30% tariff on European goods from August 1.
U.S. President Donald Trump newest salvo stunned the bloc, america’ largest buying and selling accomplice, which had hoped to keep away from an escalating commerce battle after intense negotiations and more and more heat phrases from the White Home.
Ursula von der Leyen, head of the EU govt which handles commerce coverage for the 27 member states, mentioned the bloc was able to preserve working in the direction of an settlement earlier than August 1, however was keen to face agency.
“We’ll take all crucial steps to safeguard EU pursuits, together with the adoption of proportionate countermeasures if required,” she mentioned of potential retaliatory tariffs on U.S. items coming into Europe.
EU ambassadors will focus on subsequent steps on Sunday, earlier than commerce ministers meet in Brussels on Monday for a rare assembly. They might want to resolve whether or not to impose tariffs on 21 billion euros of U.S. imports in retaliation towards separate U.S. tariffs towards metal and aluminium, or prolong a suspension which lasts till the tip of Monday.
The EU has thus far held again from retaliating towards the U.S., though it has readied two packages that might hit a mixed 93 billion euros of U.S. items
European capitals swiftly backed von der Leyen’s place.
German Financial system Minister Katherina Reiche known as for a “pragmatic final result to the negotiations”.
Trump’s proposed tariffs “would hit European exporting corporations laborious. On the identical time, they might even have a robust impression on the economic system and shoppers on the opposite aspect of the Atlantic,” she mentioned.
French President Emmanuel Macron mentioned on X that the European Fee wanted greater than ever to “assert the Union’s willpower to defend European pursuits resolutely”.
Retaliation may want to incorporate so-called anti-coercion devices if Trump didn’t again down, Macron mentioned.
The software, drawn up throughout Trump’s first time period and used towards China, permits the EU to transcend conventional tariffs on items and impose restrictions on commerce in companies, if it deems {that a} nation is utilizing tariffs to drive a change in coverage.
Spain’s Financial system Ministry backed additional negotiations however added that Spain and others within the EU had been able to take “proportionate countermeasures if crucial”.
Trump has periodically railed towards the European Union, saying in February it was “shaped to screw america”.
His greatest grievance is the U.S. merchandise commerce deficit with the EU, which in 2024 amounted to $235 billion, in response to U.S. Census Bureau knowledge. The EU has repeatedly pointed to a U.S. surplus in companies, arguing it partially redresses the steadiness.
Retaliation
Combining items, companies and funding, the EU and america are one another’s largest buying and selling companions by far. The American Chamber of Commerce to the EU mentioned in March the commerce dispute might jeopardise $9.5 trillion of enterprise on this planet’s most vital industrial relationship.
Bernd Lange, head of the European Parliament’s commerce committee mentioned he was now satisfied the primary stage of countermeasures ought to come into drive on Monday, adopted rapidly by the second bundle.
Trump has mentioned he would mirror any retaliatory strikes.
Nonetheless, Trump has repeatedly introduced sweeping tariffs in latest months, solely to row again or droop them earlier than his personal self-imposed deadlines. The expectation that he’ll once more relent has led to more and more muted responses on monetary markets, which have recovered since plunging after his preliminary “Liberation Day” announcement of massive international tariffs in April.
Three EU officers who spoke on situation on anonymity mentioned they noticed Trump’s newest threats as a negotiating ploy.
Carsten Brzeski, international head of macro at ING, mentioned Trump’s transfer instructed that months of negotiations remained deadlocked and that the state of affairs was inching in the direction of a make-or-break second for the transatlantic commerce relationship.
“The EU will now must resolve whether or not to budge or to play hardball,” he mentioned. “This may carry market volatility and much more uncertainty.”
Cyrus de la Rubia, chief economist at Hamburg Industrial Financial institution, famous that the brunt of the U.S. tariffs, if carried out, can be felt by U.S. shoppers.
Nevertheless, there would even be clear repercussions for the euro space economic system, already scuffling with weak progress.
The European Central Financial institution had used a ten% tariff on EU exports to america because the baseline in its newest financial projections, which put output progress within the euro space at 0.9% this 12 months, 1.1% in 2026 and 1.3% in 2027.
It mentioned a 20% U.S. tariff would curb progress by 1 proportion level over the identical interval and in addition pull down inflation to 1.8% in 2027, from 2.0% within the baseline state of affairs. It didn’t even supply an estimate for the potential for a 30% tariff.
Printed – July 13, 2025 04:08 am IST
