President Donald Trump speaks at a dinner for Republican Senators on the White Home in Washington, DC, on July 18, 2025.
Photograph by Allison Robbert/For The Washington Submit through Getty Photos
The U.S. has signaled it won’t let up on its Aug. 1 deadline for increased tariffs on the European Union because the bloc fights to strike a deal in time.
Over the weekend, U.S. Commerce Secretary Howard Lutnick stated he was assured {that a} commerce deal could possibly be struck with the European Union, however warned that the deadline for a baseline 30% tariff is mounted.
“That is a tough deadline, so on Aug. 1, the brand new tariff charges will are available in,” Lutnick stated Sunday on CBS Information when requested concerning the deadline for his EU tariffs.
He did sign that talks may proceed after this date, nonetheless, noting: “These are the 2 largest buying and selling companions on this planet, speaking to one another. We’ll get a deal executed. I’m assured we’ll get a deal executed.”
“Nothing stops nations from speaking to us after Aug. 1, however they’ll begin paying the tariffs on Aug. 1,” he added.
The EU has stated it’s making ready retaliatory measures towards the U.S. if punitive commerce tariffs are imposed. Lutnick dismissed the potential of the EU concentrating on gadgets like Boeing airplanes and Kentucky bourbon, nonetheless, saying, “they’re simply not going to try this.”
Final-ditch talks to succeed in a commerce settlement are ongoing, with the EU hoping it could negotiate a decrease tariff charge. The bloc had hoped it may strike an identical pact to the U.Ok., which was the primary nation to make a commerce settlement with the U.S. That deal features a 10% baseline tariff with some caveats referring to automotive, metal and aerospace imports.
However economists and analysts have turn out to be more and more skeptical about Brussels’ means to agree on an identical framework.
For one, the EU has a a lot trickier relationship with U.S. President Donald Trump than the U.Ok. does. Trump has steadily bemoaned what he sees as an imbalanced commerce relationship and unfair buying and selling practices, which the EU denies.
In keeping with the European Council, whole commerce between the EU and U.S. amounted to 1.68 trillion euros ($1.96 trillion) in 2024. Whereas the EU ran a commerce surplus in items, it recorded a deficit in providers. General, the bloc had a surplus of round 50 billion euros final 12 months, when each items and providers are taken under consideration.
Final Friday, the Monetary Occasions reported that Trump was pushing for a minimal tariff of 15% to twenty% on EU imports in any cope with the bloc. The president was additionally reportedly completely satisfied to maintain duties on the auto sector at 25%, a transfer that might damage automotive exporters in Germany notably arduous.
Talking to CNBC’s “Europe Early Version” on Monday, Arnaud Girod, head of economics and cross-asset technique at Kepler Cheuvreux, stated a charge of 15% to twenty% “could be a complete automotive crash for European exports.”
“On prime of that, you add the euro energy that we have had … so that might begin to value and to be very painful for European exports, and, in fact, would additionally probably, you recognize, reignite some fears on the inflation entrance within the U.S.,” he added.
Temper change in Europe
The White Home’s seemingly harsher stance towards Brussels has prompted policymakers to contemplate how they may reply to a 30% tariff, which might be a steep hike from the present 10% responsibility that got here into impact in April.
One EU official advised CNBC that there was a transparent shift in temper concerning the bloc’s potential response amongst all EU member states, besides Hungary, whose chief, Viktor Orban, is a Trump ally.
The bloc’s potential countermeasures towards the U.S. embrace levies on imports from the U.S. price 21 billion euros, that are presently on pause till Aug. 6. The European Fee has additionally ready a second spherical of potential tariffs concentrating on commerce price 72 billion euros.
Imports starting from clothes to agricultural merchandise and foods and drinks gadgets could possibly be affected.
In the meantime, the Wall Road Journal and Bloomberg reported that an growing variety of EU member states have signalled their assist for the bloc deploying its anti-coercion instrument. That is the EU’s strongest commerce instrument, which might give the European Fee broad powers to take retaliatory motion towards the U.S.
Kepler Cheuvreux’s Girod welcomed the motion round tariff coverage within the EU, saying the bloc was “lastly” flexing its muscular tissues and that this was wanted to succeed in an settlement.
“They have been very, very, I’d say, cool, with the U.S. up to now, and now that we’re approaching the deadline, they need to sound a bit extra aggressive,” Girod stated. “Not getting a greater deal than the U.Ok. is … a problem for the EU, and so they need to show that the entire construction of the EU is useful.”
— CNBC’s Silvia Amaro and Matthew Ward-Perkins contributed to this report.
