By Janet Ekstract NEW YORK – As U.S. President Trump rachets up his threats to slap a 30% tariff on products imported from the EU – the EU’s trade chief Maros Sefcovic told the press that a tariff of “30%, or anything above 30%…has more or less the same effect. So, practically it prohibits the trade.” Sefcovic spoke to reporters prior to an EU Foreign Affairs Council meeting in Brussels on July 14 to discuss EU-US trade relations. Meanwhile, on Saturday, in a letter Trump penned to European Commission President Ursula von der Leyen, he claimed EU policies caused “large and unsustainable Trade Deficits against the United States” while adding that such a trade imbalance is a major national security threat. His letter also warned that any retaliatory tariffs from the EU would be matched and added to his 30% base rate. Trump’s announcement comes after weeks of talks with major U.S. trading partners, failing to reach a more comprehensive trade deal, warning the new tariff rate would go into effect on August 1.
As Sefcovic further stated: “If (the tariff) stays 30 (percent) plus, simply trading as we know it will not continue, with huge negative effects on both sides of the Atlantic,” adding “I will definitely do everything I can to prevent this super-negative scenario.” Meanwhile, according to the European Council, EU-US bilateral trade in goods and services was worth 1.68 trillion euros ($1.96 trillion) in 2024. The Council said the EU and the U.S. represent close to 30% of global goods and services trade. Despite this fact, Trump continues to insist the EU has unfair trading practices, going so far as to publicly state in April that EU’s 27-nation bloc was “formed to screw” America. The U.S. leader defends his view by citing EU tariffs on U.S. goods and several “non-tariff barriers” like taxes on digital services. As a result, Trump has hiked tariffs and threatened to hike tariffs on numerous nations to assist in eliminating what he views as the U.S. trade deficit that he claims will bring manufacturing jobs back to America.
While some analysts view Trump’s sudden about-face on EU tariffs as simply a negotiating tactic to get a better tariff deal on U.S. exports, many warn that his threats must be taken seriously. EU trade officials have been negotiating with their U.S. counterparts for months to avoid the tariffs or to limit the damage that would ensue. Initially, Trump said there would only be a 20% tariff until May when he threatened to raise the rate of what he terms as “reciprocal” tariffs on EU goods to 50% resulting in the EU boosting trade talks. As Sefcovic reiterated in Brussels on Monday, the EU wants to negotiate a solution and he told the press he feels “we are very close to an agreement.” On July 13, the EU announced it would delay implementing planned countermeasures of 21 billion euros ($25 billion) worth of U.S. exports from July 14 through early August to allow more time to negotiate an agreement. The countermeasures are in retaliation for the 25% tariff Washington put on all steel and aluminum imports from the EU and Denmark’s Foreign Minister Lars Lokke Rasmussen told EU leaders that the bloc seeks a fair deal and it should be prepared to retaliate. Prior to Monday’s EU trade meeting, Rasmussen said: “If you want peace, you have to prepare for war, and I think that’s where we are. So, of course, we shouldn’t impose countermeasures (at) this stage, but we should prepare to be ready to use all the tools in the toolbox.”
Are Trump’s tariff threats just a negotiating tactic or does he mean what he says? On July 12, three EU officials told Reuters that is 30% tariff threat is a negotiating tactic. A number of analysts have said Trump’s threats are a way to extract concessions from trading partners. The EU was facing a threat of 50% U.S. tariffs on its steel and aluminum exports, 25% on cars and car parts and 10% on most other products. Trump was also considering further tariffs on pharmaceuticals and semiconductors as well. The food industry in Europe is jittery with wine and cheese producers in France warning that the proposed 30% tariffs will cause major havoc on its agricultural industry. President of the Association Nationale des Industries Alimentaires (ANIA) in France told Reuters that a 30% tariff will be “disastrous” for the French food industry. Also, France’s CEO of its dairy association FNIL Francois Xavier Huard said “It’s a real shock for milk and cheese producers – this is an important market for us.” Huard added: “It’s a new environment we will have to get used to – I don’t think this is temporary,” explaining that industry leaders might need to rethink strategies for the markets they operate in. France exports almost half of its dairy production including to the U.S. who imports butter and yogurt but primarily specialty cheeses like Brie. Huard warned that French food exporters stand to lose tens of millions of euros annually if changes aren’t made and this could cause U.S. shoppers to avoid their products due to higher prices for American consumers. France’s National Center for the Promotion of Agricultural and Food Products (CNPA) President Yannick Fialip said the industry will end up being “less competitive” and noted that a weaker dollar already is adding pressure on exports to the U.S.
EU Commission President von der Leyen responded in a post on X to Trump’s new tariff proposal with a warning that such steep tariffs will cause a negative impact on the U.S. economy not just the EU economy while reiterating the EU’s willingness to continue negotiations. As von der Leyen stated: “A 30% tariff on EU exports would hurt businesses, consumers and patients on both sides of the Atlantic,” adding We will continue working towards an agreement by August 1. At the same time, we are ready to safeguard EU interests on the basis of proportionate countermeasures.” In a separate statement on American-EU trade, von der Leyen said she plan to continue to deepen global partnerships “firmly anchored in the principles of rules-based international trade.” U.S. analysts have expressed concerns that Trump’s escalating tariffs on EU imports will hurt American consumers in five ways. The first would be in higher prices for imported goods followed by reduced purchasing power with the potential for reduced choice so some popular products that won’t be imported due to prohibitive pricing. There would also be the threat of retaliation from trading partners on American exports, making U.S. goods so expensive for foreign consumers, hurting demand as well as having a disproportionate impact on low-income families. Despite the Trump administration’s argument that tariffs protect domestic industries and create jobs – in a recent article, analysts at the Center for American Progress reported that the economic burden will eventually end up adversely affecting American consumers and businesses, leading to job losses and reduced economic competitiveness. Meanwhile, The Tax Foundation has estimated that Trump’s tariffs could raise federal revenue by $2.0 trillion over the next decade.
