Can EU safe a US commerce pact regardless of Trump’s new risk? – DW – 05/23/2025 | EUROtoday

US President Donald Trump on Friday threatened a 50% tariff on items from the European Union beginning Jun 1, citing a scarcity of progress in present commerce negotiations.

“Their 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 U.S. of more than $250,000,000 a year, a number which is totally unacceptable,” he wrote in a Truth Social publish Friday morning.

“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50 percent Tariff on the European Union, starting on June 1, 2025,” he wrote.

The new risk got here hours earlier than a name between EU Trade Commissioner Maros Sefcovic and US Trade Representative Jamieson Greer to hunt a foundation for negotiation to move off a transatlantic commerce struggle.

The name takes place simply days after Brussels responded to the Trump administration with a brand new listing of concessions it’s keen to supply underneath efforts to achieve an analogous deal on commerce like China and the UK.

Following a tense standoff, Washington and Beijing reached a non permanent dealtwo weeks in the past, slashing punitive tariffs from over 100% to extra sustainable ranges. As negotiations for a long-term deal intensify, for the subsequent 90 days Chinese items getting into the US will incur a 30% tariff, whereas exports from the US to China will face a ten% levy.

Days earlier, Trump secured the first define of a commerce deal since proclaiming April 2 as “Liberation Day,” when he introduced stiff worldwide tariffs. The broad pact with the United Kingdom reduces tariffs on British carmakers exporting to the US and grants American exporters, together with farmers and ethanol producers, enhanced entry to the UK market.

EU commerce deal ‘tougher to achieve’

While Trump continues to play hardball with Brussels, claiming in his publish that the EU was “formed with the primary purpose of taking advantage of the United States,” Andrew Kenningham, chief Europe economist for the London-based Capital Economics analysis home, thinks financial pressures will forestall him from pushing Brussels too far.

“The two new deals will make EU negotiators more confident that they can stick broadly to the policy already set out, which is to try to avoid escalation, threaten some retaliation but with a delay, while at the same time be willing to negotiate,” Kenningham advised DW.

Even so, Capital Economics warned in a analysis word that an EU-US deal “appears harder to reach,” pointing to the bloc’s massive items commerce surplus with the US and the problem of reaching consensus among the many 27 EU member states.

The EU has already threatened new tariffs on €95 billion ($107 billion) of US items in response to Trump’s earlier tariffs on aluminum, metal and European automakers, however paused them to permit negotiations to proceed. Brussels can also be contemplating curbs on scrap metal and chemical exports to the US.

EU provide seemingly not sufficient

Claudia Schmucker, head of the Center for Geopolitics, Geoeconomics, and Technology on the German Council on Foreign Relations, does not suppose the China and UK offers actually “change anything.”

“Trump is still expecting that the EU will offer something he feels is valuable enough,” Schmucker advised DW, including that the president’s calls for from Europe stay a “mystery,” however are more likely to embrace extra agriculture and vitality imports.

Olof Gill, a spokesperson for the European Commission, declined to remark instantly after Trump’s new tariffs risk, saying he was ready till after the decision between Sefcovic and Greer, reportedly scheduled for afterward Friday.

The Financial Times reported earlier on Friday, that Greer is more likely to reject the EU’s new listing of proposals, demanding unilateral concessions as a substitute of mutually lowering tariffs.

The new EU proposal reportedly seeks to spice up EU purchases in strategic sectors, corresponding to vitality, in addition to growing cooperation on 5G and 6G cellular networks. It would additionally ramp up strategic cooperation in delicate sectors which have undergone commerce investigations leading to US tariffs, corresponding to metal and aluminum, semiconductors and vehicles.

The EU provide additionally contains extra imports of nonsensitive agricultural items.

Last 12 months, the US had a $235.6 billion (€210 billion) commerce deficit in items with the EU, a 12.9% enhance on the earlier 12 months, in accordance with the Office of the US Trade Representative. The newest 2023 knowledge from Eurostat, the EU’s statistics company, places the EU items surplus at €157 billion.

Claudia Schmucker thinks the president’s adverse rhetoric, performs into Brussels’ palms because it tries to attain consensus on methods to proceed, at the same time as Hungary, Italy and a few others push for bilateral offers.

“Even though some EU states are not fully on board with Brussels’ negotiating position, Trump’s antagonism is enough to help boost EU unity,” she mentioned.

EU: A key marketplace for US providers exports

Miguel Otero, senior fellow for worldwide political economic system at Spain’s Elcano Royal Institute, believes the US “has a lot to lose” from any Trump misstep.

“The EU has a big deficit when it comes to services, especially financial and digital services and entertainment platforms,” Otero advised DW. “The US cannot afford to lose the European market. If we act as a single entity, then the EU has as much leverage as China.”

Although the EU has a big items surplus with the US, with a fifth of EU items crossing the Atlantic final 12 months, the bloc additionally accounts for 25% of US providers exports, price $275 billion in 2024. Including Switzerland and the UK, 42% of US providers exports are despatched to the European market.

The European Commission, the bloc’s govt arm, has vowed to launch a dispute on the World Trade Organization (WTO) in opposition to Trump’s “reciprocal” tariffs and levies on vehicles and auto components.

Higher tariff deadline approaches

As the July 8 deadline for the 90-day pause on “reciprocal” tariffs on the EU approaches, the window for a deal is narrowing much more after Trump’s newest tariffs announcement.

Capital Economics predicts  Trump could push negotiations to the brink, sustaining strain on buying and selling companions.

German Economy Minister Katherina Reiche, nevertheless, struck a extra optimistic tone final week, emphasizing the US’ very important position as a commerce accomplice for the EU.

“We negotiate from a position of economic strength … but one that must be wielded carefully,” Reiche mentioned. “A solution is essential, as escalation will leave no winners.”

This article was first revealed on May 16, and up to date on May 23 to incorporate Donald Trump’s newest tariff announcement.

Edited by: Ashutosh Pandey