The European Union (EU) is readying itself to retaliate against the U.S. with exorbitant tariffs of its own. The EU plans to quickly hit the U.S. with 30% tariffs on some $117 billion (€100 billion) worth of goods in the event of no deal and if President Donald Trump carries through with his threat to impose that rate on most of the bloc’s exports after Aug. 1.
“We are now approaching the decisive phase in the tariff dispute with the USA. We need a fair, reliable agreement with low tariffs,” German Chancellor Friedrich Merz told reporters in Berlin on Tuesday after a meeting with his Czech counterpart Petr Fiala. “Without such an agreement, we risk economic uncertainty at a time when we actually need exactly the opposite.”
Bloomberg reports that as a part of a first wave of countermeasures, the EU would combine an already approved list of tariffs on $24.57 billion (€21 billion) of U.S. goods and a previously proposed list on an additional $84.4 billion (€72 billion) of American products into one package, a European Commission spokesman said on Wednesday.
READ: Europe leverages AI to offset impact of US tariffs (April 9, 2025)
According to people familiar with the matter, the U.S. exports, which include industrial goods such as Boeing Co. aircraft, U.S.-made cars and bourbon whiskey, would face a levy that matches Trump’s 30% threat.
Since early 2025, the U.S. under President Trump has sharply escalated its use of tariffs as a tool for economic and political leverage. Initially targeting Canada and Mexico with near‑universal 25 % tariffs on imports (except energy products), the policy extended to China, the EU, and other allies. Steel and aluminum duties, 25 % and 10 %, respectively, were broadened to cars, car parts, and semiconductors, with some levies reaching up to 30 % by April.
The U.S. imposed a baseline 10 % reciprocal tariff on most imports globally with country‑specific hikes: 20 % on EU goods, and threats of 30 % by August 1. Commerce Secretary Lutnick confirmed August 1 as a firm deadline for the EU to negotiate or face elevated tariffs.
In response, the EU mobilized a strong defense. In mid‑April, it reinstated counter‑tariffs on approximately $24.57 billion (€21 billion) of U.S. goods, with further measures covering $84.4 billion (€72 billion) planned for next phases. EU proposals targeted diamonds, eggs, poultry, lumber, and home appliances at 25 % duties, focusing on sensitive sectors and Republican‑led states. Brussels also warned of non‑tariff retaliations, digital taxes and public‑procurement exclusion.
READ: Can Donald Trump kill Europe’s internet? (June 23, 2025)
The economic fallout is serious: the EU downgraded its 2025 GDP forecast to just 0.9 % growth, citing trade uncertainty sparked by U.S. tariffs. Businesses like Sweden’s Husqvarna are retooling supply chains to sidestep anticipated costs. Deutsche Bank reports that U.S. firms are absorbing most tariff costs, raising consumer price concerns later in the year.
Politics has tightened further: EU leaders, notably Ursula von der Leyen and Poland’s Donald Tusk, have urged unity and retaliatory readiness via the bloc’s “anti‑coercion instrument.” Germany and France are backing tougher stances, even as some EU members consider easing car tariffs to defuse tensions.
With an August 1 deadline fast approaching, both sides juggle negotiations and preparation for intensified trade conflict, risking global market disruptions if no deal is reached.
The overwhelming preference is to keep negotiations with Washington D.C. on track in a bid for an outcome to the impasse ahead of next month’s deadline, with EU and U.S. negotiators scheduled to continue talks on Wednesday.