In a dramatic escalation of US trade policy, President Donald Trump has threatened to impose a blanket 30 per cent tariff on most imports from the European Union effective August 1, after months of tense negotiations over a broader US-EU trade deal failed to deliver. The White House has also indicated similar duties are set for Mexico and several other countries in the coming weeks.
Trump’s latest move comes on the heels of earlier threats of a 50% tariff on EU goods—a figure that was lowered amidst ongoing talks, but could be revived if the trade conflict intensifies.
While the administration has signaled some flexibility, with Treasury Secretary Scott Bessent stating “quality of deals” is a higher priority than the August 1 deadline, European partners have so far been unable to secure a breakthrough.
Europe Responds: “If They Want War, They Will Get War”
The EU, America’s largest trading partner, is now bracing for confrontation. According to several reports, Brussels is preparing a detailed “reprisal plan” to target US companies should Washington carry out its tariff threat.
Key officials are holding emergency meetings to coordinate the bloc’s response, with some, including German representatives, warning, “If they want war, they will get war,” while still expressing hope for a last-minute deal.
At stake is not just the flow of goods but the future of the US–EU trade relationship, which accounts for over 20 per cent of EU exports and supports millions of jobs on both sides of the Atlantic. The tariffs threaten to disrupt industries from automobiles and machinery to wine and pharmaceuticals, raising concerns about added costs for American retailers and consumers—especially as the holiday import season looms.
Divisions and Tensions Within the EU
Within the EU, divisions remain over how best to respond. Germany has pushed for compromise, aiming to protect its vast industrial exports to the US, while France and several other states insist there should be no capitulation to Washington’s demands. The bloc had sought a comprehensive deal with reciprocal zero tariffs on industrial goods, but is now weighing a temporary arrangement to buy more time for negotiations.
US Industry: Winners and Warnings
Some US sectors, especially steel and automotive, are celebrating Trump’s aggressive approach. Cleveland-Cliffs, a major steelmaker, credited the tariffs for record shipments and stronger domestic market performance, and urged Canada to adopt similar protectionist measures. However, other industries, including retail and automobile manufacturers such as Stellantis, warn of significant financial losses and forecast billions in restructuring costs unless a deal is reached.
Economic and Political Stakes
For both sides, the stakes are high. For Trump, who campaigned on bringing jobs and manufacturing back to the US, the tariffs have already delivered tens of billions in new customs revenue, with US Treasury figures reporting over $100 billion collected in 2025 alone. But economists warn that the latest duties could dampen GDP growth and increase inflation, with Bloomberg Economics estimating a potential 0.6% hit to US GDP and a 0.3% rise in consumer prices if the highest tariffs are implemented.
Meanwhile, European support for the EU has actually strengthened in response to Trump’s trade hardball, with officials noting a renewed sense of unity and purpose in confronting external pressure.
High-level negotiations are continuing in Washington and Brussels as the August 1 deadline approaches. US officials say they remain “confident” a deal can be struck but warn that tariffs will be imposed if talks falter, and that countries can “keep talking after August 1”—but only after duties are collected.
With both sides preparing for economic and political fallout, the evolving trade conflict could have far-reaching consequences for global supply chains, markets, and consumers for months, if not years, to come.
