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Tariffs

EU and US Reach Trade Agreement Reprieve Amid Threats of Retaliatory Tariffs

Strategic Insights

— 2 min read

Brussels has backed down at the eleventh hour from plans to impose €21bn (£18bn) retaliatory tariffs on the US after Donald Trump threatened to punish the bloc with 30pc levies. The EU's tariffs on US steel and aluminium exports were due to come into effect from midnight on Monday, but Ursula von der Leyen, the European Commission president, said these will now be put on hold until early August. The reprieve will give negotiators in Brussels more time as they battle to secure a trade agreement with the US. The import tariffs threatened by the US president on Saturday night are three times higher than those imposed on Britain.

Key Takeaways:

  • The EU will delay its retaliatory tariffs on US steel and aluminium exports until early August, giving negotiators more time to secure a trade agreement.
  • The threatened US tariffs on the EU, announced by Donald Trump on Saturday night, are three times higher than those imposed on Britain.
  • The EU's decision marks a shift in tone from the bloc, which has been attempting to play hardball with the US president.
  • Ursula von der Leyen, the European Commission president, stated that the time has come for negotiations, signaling a more conciliatory approach towards the US.
  • The EU and Indonesia have reached a "political agreement" to conclude a free trade deal in September.
  • Leaders across the EU remain divided on whether the bloc should continue to negotiate with the aim of securing an improved deal or opt for a trade framework.
  • The US had threatened to impose tariffs on the EU and Mexico, with the EU counter-tariffs set to be implemented from August 1.
  • Donald Trump wrote an open letter to Ursula von der Leyen, stating that the US must move away from the EU's "tariff and non-tariff policies."
  • European Commission President Ursula von der Leyen stated that "economies of uncertainty meet geopolitical volatility, partners like us must come closer together."
  • German Finance Minister Lars Klingbeil stated that "serious and solution-oriented negotiations" with the Trump administration are necessary, while Ireland's Foreign Affairs Minister Simon Harris expressed frustration with the US president's negotiation style.
  • French President Emmanuel Macron called on the European Commission to "assert the Union's determination to defend European interests," while Italian Deputy Prime Minister Matteo Salvini accused the EU of being too soft in negotiations.

Statistics:

  • The proposed €21bn (£18bn) retaliatory tariffs on the US are three times higher than the tariffs imposed on Britain.
  • 10% tariffs are currently in place on most British exports to the US.
  • The US tariffs on the EU and Mexico are set to be implemented from August 1.
  • The EU's tariffs on US steel and aluminium exports will be delayed until early August.
  • The EU and Indonesia have agreed to conclude a free trade deal in September.

Sources:

  • European Commission President Ursula von der Leyen
  • Donald Trump, US President
  • Lars Klingbeil, German Finance Minister
  • Simon Harris, Ireland's Foreign Affairs Minister
  • Emmanuel Macron, French President
  • Matteo Salvini, Italian Deputy Prime Minister
  • Truth Social
  • Sueddeutsche Zeitung
  • RTE
  • European Commission press release

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