U.S. President Donald Trump walked after arriving at the Marine Corps in Washington, DC, USA on Sunday, July 13, 2025.
Bonnie Cash/upi/Bloomberg by Getty Images
President Donald Trump says he will hit 30% tariff Products imported from the group starting from August 1.
European leaders are fast Responsesaid they will still reach an agreement with the United States before August begins. Also the EU farther Delay Countermeasures This will take effect this week and warns that other retaliatory actions are underway.
EU Trade Commissioner Maros Sefcovic on Monday Tell The letter was “regretful and disappointed…especially considering the advanced stage of our ongoing negotiations”.
Sefcovic stressed that the EU remains focused on finding negotiated solutions but is preparing for all possible outcomes, which may include countermeasures. He also said he would talk to his American counterparts later that day.
“I can’t imagine walking away without real effort,” the Trade Commissioner said.
Less than a month before Trump’s new deadline, the EU will have to act quickly to prevent tariffs from taking effect or risk further escalation.
The EU is under pressure
While EU leaders remain determined to make a deal, economists and analysts warn that the threat of tariff rates has added new pressure to 27 people.
“This is bad news for Europe,” Alicia Garcia-Herrero, senior fellow at Bruegel and chief economist at Natixis Asia-Pacific, told CNBC’s “Early European Edition” on Monday.
“Trump is pushing the commission to really come up with a better deal,” she added.
Carsten Brzeski, head of macroscopy at ING, and Inga Fechner, a senior economist focusing on global trade, sent a similar tone.
“Trump’s letter to the EU is not a love letter, nor a hate letter. It is a letter that increases the pressure on the ongoing negotiations,” they said in a note on Sunday.
But the EU still has the option, which suggests that the EU can propose a way to increase its purchase of U.S. products from soybeans to military equipment, economists say.
Brzeski and Fechner said Brussels could also reduce current taxes and other trade barriers on U.S. cars, or introduce export bans on products that are important to the U.S., such as those of European pharmaceuticals.
The fourth and final option, economists suggest, is to increase tariffs on U.S. goods or tariffs on digital services for U.S. technology companies and ongoing tariffs on stricter regulations on U.S. technology companies,” economists suggest. “This could trigger a full-scale explosive trade war.
Future compromise?
Despite additional pressure on the EU, the group and Washington, D.C. are expected to reach an agreement in the coming weeks.
“I think both sides will get a compromise. It’s in the best interests of the United States and the European Union,” said Joerg Kraemer, chief economist at Commerzbank.
“I expect the average tariff rate for the EU exports to the United States in the end,” he told CNBC’s “early European version” on Monday.
It is worth noting that this rate will be higher than 10% before expected Many, agree with the deals reached by the UK and the US
Meanwhile, Berenberg economist Salomon Fiedler seems more optimistic, noting that the bank still expects to assume 10% responsibilities, even if “risks are now skewed towards higher interest rates.”
One reason for optimism is that Trump took an extreme position repeatedly at first and then later compromised. “The fact that Trump has only threatened the new 30% interest rate on August 1, rather than implementing it faster, suggests he is still seeking negotiations,” he said.
Fiedler believes that Trump may also shy away further tariffs as businesses start passing on higher import costs to consumers. He added that domestic political backgrounds may also change, which may make the U.S. president try to keep his focus on trade.
On the other hand, the risk factors for higher taxation include the impossible disappearance of the U.S. trade deficit (the argument Trump often uses as tariffs) and the U.S. government’s reliance on tariff revenues from supplementary budgets.
“There is always hope for good negotiations – bilateral removal of all relevant taxes and some other trade barriers between the EU and the United States – so far, everything has disappeared.”
