US threatens sharp 17% tariffs on EU food exports

The United States has threatened to impose tariffs of up to 17 per cent on European Union agricultural exports, sources close to the discussions have revealed, marking a significant escalation in the ongoing transatlantic trade dispute.

This development comes just days before a critical July 9 deadline for reaching an agreement between the two economic powers, Caliber.Az reports citing foreign media.

US President Donald Trump has currently paused plans to implement a 10 per cent “reciprocal” tariff on EU imports, which would have been added to a 10 per cent baseline rate that has been in place since April. Until recently, EU officials had expected talks to maintain tariffs at this baseline level.

It remains unclear whether the proposed 17 per cent tariff on foodstuffs would be additional to the existing tariffs or would replace them. The US administration has been demanding broad exemptions from EU regulations for American companies and a reduction in the EU’s trade surplus with the US. However, Brussels has rejected the latest US proposals.

Negotiations are currently focused on possible carve-outs, with the EU seeking exclusions for certain goods such as aircraft parts and spirits. Officials are reportedly working on a five-page draft “agreement in principle,” though much of the text remains unresolved.

European Commission President Ursula von der Leyen expressed hope on Thursday for an agreement that would allow talks to continue towards a final deal. Nevertheless, Washington is urging countries to finalise binding agreements by the July 9 deadline.

EU Trade Commissioner Maroš Šefčovič was informed of the possible 17 per cent agrifood tariffs during meetings in Washington on Thursday, with the 27 EU ambassadors briefed the following day.

Last year, EU exports of agricultural products to the US, including wine, were valued at €48 billion. Šefčovič has consistently warned that altering EU regulations to meet US demands is a red line, although the bloc is currently pursuing some deregulation, including the weakening of certain environmental rules.

Within the EU, there is a division between member states willing to accept higher tariffs in exchange for certainty and those advocating for retaliatory measures to pressure the US into compromise.

Germany’s Chancellor Friedrich Merz, representing the EU’s largest and most export-reliant economy, has urged the Commission to agree a swift deal, seeking exemptions from Trump’s 25 per cent tariffs on vehicles and 50 per cent on steel.

However, several ambassadors reportedly called for a tougher stance against Washington at the meeting on July 4. According to diplomats, the US has outlined three possible scenarios for the July 9 deadline: countries agreeing “in principle” would maintain 10 per cent tariffs with possible future relief; countries without an agreement would revert to the higher tariffs announced in April; and those deemed negotiating in bad faith could face even steeper tariffs.

In anticipation of US duties on its products, the EU has already approved counter-tariffs on €21 billion of US exports effective from July 14 and is preparing an additional package valued at €95 billion, which could target aircraft and food products.

A European Commission spokesperson stated: “The EU position has been clear from the outset: we favour a negotiated solution with the US, and this remains our priority. At the same time, we are preparing for the possibility that no satisfactory agreement is reached.”

The White House declined to comment on the matter.

By Aghakazim Guliyev