Trump threatens EU with new tariffs, raising fears of transatlantic trade war

US President Donald Trump has reignited transatlantic trade tensions by threatening to impose sweeping 30 percent tariffs on the European Union, unless a new agreement is reached by August 1. The move, announced on July 12, throws months of painstaking negotiations into turmoil and raises the specter of a full-blown trade war between longstanding allies.

In response, European Commission President Ursula von der Leyen emphasised the EU’s preference for a negotiated solution and on July 13 announced a delay in retaliatory tariffs over separate US duties on steel and aluminium, Caliber.Az reports via AFP. 

“We have always been very clear that we prefer a negotiated solution,” von der Leyen said. “This remains the case, and we will use the time we have now until August 1.”

EU officials said the bloc remains committed to securing an agreement, but is also preparing to retaliate if necessary. A new package of countermeasures is expected to be presented to EU trade ministers at a meeting in Brussels on July 14. The measures could be enacted swiftly should Washington follow through with the proposed tariffs.

The EU has previously threatened to impose duties on US goods worth up to €100 billion ($117 billion), including key exports such as automobiles and aircraft. However, diplomats say the finalized list may be scaled down to around €72 billion.

Trump’s latest threat also targets Mexico and comes amid mounting criticism of his erratic trade policies. Since returning to office in January, he has imposed and lifted tariffs unpredictably, affecting both allies and rivals, and shaking global markets.

European leaders reacted with caution but unity. French President Emmanuel Macron urged the European Commission to “resolutely defend European interests,” while German Chancellor Friedrich Merz said he had spoken with Trump, Macron, and von der Leyen in recent days and pledged to “engage intensively” to reach a resolution. Italian Prime Minister Giorgia Meloni warned that a “trade war within the West” would weaken all parties involved.

The EU had been preparing to impose retaliatory tariffs worth €21 billion on US goods in response to earlier US steel and aluminium duties. However, it agreed in April to suspend those measures to create space for broader trade talks. That suspension was set to expire overnight from July 14 to 15, but has now been extended in light of ongoing negotiations.

Trump’s July 13 letter defending the new 30-percent tariff cited the US trade imbalance with the EU. The planned levy is significantly higher than the 20 percent tariff proposed in April, which was postponed until mid-July.

Despite boasting of a wave of new trade deals, the Trump administration has so far secured only two new agreements — with Britain and Vietnam — and reached temporary tariff reductions with China. 

By Sabina Mammadli