Donald Trump has been warned that trade between the United States and the European Union will be “almost impossible” if he follows through on a threat to impose a 30% tariff. The bloc’s trade commissioner, Maroš Šefčovič, said such a tariff rate, or one set even higher, would have a huge impact on trade.
He said: “It will be almost impossible to continue trading as we are used to in a transatlantic relationship.” European trade ministers meet in Brussels on Monday (July 14) after the US president‘s surprise announcement of 30% tariffs on the EU.
The EU is the United States’ biggest business partner and the world’s largest trading bloc. The Trump administration’s decision would have repercussions for governments, companies and consumers on both sides of the Atlantic.
Ahead of the Brussels meeting, Mr Šefčovič warned transatlantic supply chains would be heavily affected, but said the feeling on the EU side was that the two sides were close to reaching an agreement. The trade commissioner said he would be speaking to US Commerce Secretary Howard Lutnick on Monday afternoon.
Denmark’s Foreign Minister, Lars Løkke Rasmussen, told reporters ahead of the Brussels meeting that the EU shouldn’t impose countermeasures now, but should prepare to be ready to use all the tools in the toolbox.
He added: “So we want a deal, but there’s an old saying: ‘If you want peace, you have to prepare for war’.”
The tariffs are due to start on August 1 and could make everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the US. They threaten to destabilise economies across Europe.
Brussels had already decided to suspend retaliatory tariffs on US goods which were due to begin today. Those measures will be delayed until August 1.
Mr Šefčovič said: “I’m absolutely 100% sure that a negotiated solution is much better than the tension which we might have after the 1st of August. I cannot imagine walking away without genuine effort.
“Having said that, the current uncertainty caused by unjustified tariffs cannot persist indefinitely and therefore we must prepare for all outcomes, including, if necessary, well-considered proportionate countermeasures to restore the balance in our… relationship.”
Brussels officials had told reporters on Friday (July 11) they weren’t expecting a letter like the one sent on Saturday and a trade deal was to be inked in “the coming days”.
Mr Trump imposed tariffs in April on dozens of countries, before pausing them for 90 days to negotiate individual deals.
Once the three-month grace period ended, he began sending tariff letters to leaders, including of the EU and Mexico. However, he has again pushed back the implementation date for what he insisted would be just a few more weeks.
Mr Šefčovič said the EU is doubling down on efforts to open new markets and pointed to a new economic agreement with Indonesia by way of an example.
