Donald Trump has warned about plans to impose a 50% tariff on EU imports starting next month, adding that talks with the bloc “will not go anywhere” as it increases the threat of overturning global trade.
The move expands the trade war with the EU two weeks after the US agreed with China to cut tariffs in an agreement that comforted global investors.
In his true social platform post Friday, Trump attacked the bloc for trade barriers, VAT taxes, ridiculous corporate penalties, non-monetary trade barriers, financial manipulation and financial manipulation. [and] Unfair and unfair lawsuits against American businesses.”
He added: “Our discussion with them is not going anywhere! Therefore, we recommend a 50% straight tariff on the European Union from June 1, 2025.”
Such a level would be more than twice the tariff rate announced by the US president on April 2 for the EU on his own style “liberation day.”
Consultant company Capital Economics said that if implemented, a 50% US tariff on EU imports could reduce Germany’s GDP by 1.7% over three years and reduce Ireland by 4%.
However, some analysts have portrayed threatened tariffs as a negotiation tactic primarily to put pressure on the EU.
“Our hope is that no such tariffs will be imposed because the President will instead cite “progress,” said Andrew Bishop of consulting firm Signum Global Advisers in a note to his client by the June 1 deadline.
The stock market has declined following the Trump Post, with the S&P 500 down 0.9% in morning trading on Wall Street. The Stoxx Europe 600 index initially fell by more than 2%, then rebounded to 1.1% lower per day.
The stock market recovered from a defeat following the “liberation day” that was aided by moves such as Trump’s climbing in China, but was shaken by his latest trade salvo.
Andrew Peas, chief investment strategist at Russell Investments, said the president’s move “puts a dent in the view that the market will hold Trump down.”
US trade representative Jamieson Greer is scheduled to speak with EU trade commissioner Maroššefčovič later on Friday.
The US imposed a 20% “mutual” rate on most EU products in April, but halved it until July 8th to allow time for consultations. It holds 25% levels on steel, aluminum and car parts, and promises similar actions on pharmaceuticals, semiconductors and other products.
BLOC must choose whether to retaliate with a rebuttal or agree to the Company to make concessions.
Member States have approved a package of 21 billion euros with up to 50% tariffs on items such as corn, wheat, motorcycles, clothing and more.
The European Commission is still consulting on a list of 95 billion euros of possible measures, including Boeing aircraft, automobiles and bourbon whiskey.
The European market was hit by Trump’s latest threat, and it has been particularly affected by exporters and stocks related to economic health, such as banks.
Carmaker Stellantis fell by 4% and Deutsche Bank fell by 3.7%.
Traders moved to prices with faster interest rate cuts from the European Central Bank, helping the tariff-hit economy.
The chances of third-quarter rate reductions by the end of this year have risen to more than 30% compared to about 15% on Friday, according to levels implied by the swap market.
“We are pleased to announce that we are committed to providing a range of investments in bonds and equities at Nordea Asset Management,” said Kasper Elmgreen, Chief Investment Officer of Bonds and Equities. “Every day we don’t trade, we risk serious financial damage.”
US officials, along with U.S. Commerce Secretary Howard Lutnick, are unhappy with other countries not offering the concessions they have, and Brussels said on Thursday it was “impossible” to negotiate.
Washington hopes Brussels will reduce import barriers and reduce the size of the US trade deficit with BLOC, which totaled to $192 billion in 2024.
The Trump administration is taking into consideration EU food and product standards protectionists and hopes the bloc will unilaterally drop tariffs. The EU proposes that both sides will dispose of tariffs on all industries and some agricultural products.
Brussels also offers to tackle China’s overcapacity in sectors such as steel and automobiles, and to help discuss restrictions on technology exports to Beijing.
However, they refused to discuss the discarding, demanding, or undermining EU regulations by US tech companies.
The European Commission said it would not comment before the call between Greer and Sifchovich.
Trump’s post on Friday contrasted with his administration’s move to ease trade tensions with Beijing this month. The US recently sealed its trade agreement with the UK.
But negotiations with other countries are moving slowly, with Trump officials recently signaling that they will take a tougher approach again, warning that countries that have not negotiated in “integrity” will once again face the biggest tariffs.
Additional Reports by Emily Herbert and Peter Foster
