Trump’s Tariff Threat Sparks EU Alarm as $2 Trillion Trade Relationship Hangs in the Balance

(Worthy News) – European Union leaders issued sharp warnings Monday after President Donald Trump threatened to impose sweeping 30% tariffs on EU imports by August 1, a move they say would severely disrupt nearly $2 trillion in annual trade between the two economic powerhouses.

EU Trade Commissioner Maros Sefcovic said the tariffs, if enacted, would be “prohibitive” and could effectively halt transatlantic trade. “It will be almost impossible to continue the trade,” he said at a press briefing in Brussels. “We remain convinced that our transatlantic relationship deserves a negotiated solution… that builds the basis for renewed stability and cooperation.”

Trump’s Saturday announcement on Truth Social declared that letters had been sent to the EU and Mexico notifying them of the incoming tariffs. “Please understand that these tariffs are necessary to correct the many years of European Union Tariff, and Non-Tariff, Policies and Trade Barriers,” he wrote. The move is part of a broader pressure campaign targeting over 20 countries, with the White House demanding more favorable terms in trade negotiations.

White House economic adviser Kevin Hassett said the president was reacting to “sketches of deals” that did not meet his expectations. “He sent a line in the sand,” Hassett told ABC’s This Week, describing Trump’s demands as a push for “reciprocity” and fairer treatment of U.S. exports.

The European Union, which had initially planned retaliatory measures to begin Monday, opted instead to delay them in hopes of avoiding immediate escalation. European Commission President Ursula von der Leyen confirmed Sunday that the EU would “suspend countermeasures” temporarily to give talks more time, but warned that proportionate responses were ready if needed.

Italian Foreign Minister Antonio Tajani said the EU has already prepared 21 billion euros ($24.5 billion) in tariffs against U.S. goods. “We are ready to respond, but we still prefer dialogue,” he said, calling for “zero tariffs” among Western allies including Canada, the U.S., Mexico, and Europe.

The stakes are enormous: in 2024, EU-U.S. trade hit an all-time high of €1.68 trillion ($1.96 trillion), exceeding the GDP of Spain. The U.S. recorded a $275.4 billion goods trade deficit with the EU last year, while the EU posted a €50 billion surplus when including services.

European ministers convened in Brussels Monday to strategize. Danish Foreign Minister Lars Lokke Rasmussen warned of severe consequences if the standoff escalates into a trade war. “We do not want any kind of trade war with the U.S. It will be devastating, not just for Americans, but also for Europe,” Rasmussen said.

As talks with the U.S. teeter on collapse, the EU is accelerating efforts to diversify its trade ties. Sefcovic confirmed ongoing negotiations with South Korea, Japan, and Southeast Asian countries, including Vietnam and the Philippines. Over the weekend, the EU announced an agreement in principle with Indonesia and is preparing for high-level trade summits with China, Mexico, and the Mercosur bloc.

“Economic uncertainty and geopolitical volatility demand stronger partnerships,” von der Leyen said during a joint appearance with Indonesia’s president. “Europe will not be cornered.”

Latest Worthy News