Tensions are rising between the United States and the European Union as a key deadline approaches. By July 9, the 90-day suspension of new U.S. tariffs—referred to as "reciprocal tariffs" by President Trump—will expire. If no trade deal is reached by then, EU goods imported to the U.S. may face tariffs as high as 50%. The European Union has also warned that retaliatory measures are ready, though currently paused.
Trade between the U.S. and EU is highly significant, making up roughly 30% of global goods trade. In 2024, total trade in goods and services reached nearly $2 trillion. While the EU posted a goods surplus of around €198 billion, it ran a services deficit of €148 billion, still ending with an overall trade surplus.
President Trump has often criticized the U.S.-EU trade relationship, claiming it's unbalanced and unfair. Recently, he revealed he had sent 12 letters with a “take it or leave it” stance on tariffs, though it’s unclear if the EU was one of the recipients.
Negotiations have been slow and difficult. EU officials aim for a basic political agreement before the deadline rather than a detailed deal. European Commission President Ursula von der Leyen has acknowledged that reaching a full agreement is impossible within the short timeframe but remains optimistic for a "principled understanding."
U.S. officials have been more reserved, with Treasury Secretary Scott Bessent noting it’s uncertain whether a deal will be struck in time. Despite recent discussions in Washington D.C., no concrete breakthrough has been announced.
Even if a partial agreement is reached, uncertainty will persist. Any deal made now may remain fragile, open to renegotiation or reversal by either party. For the EU, accepting a basic 10% tariff might be a way to extend negotiations without immediate escalation.
Nonetheless, if full tariffs are implemented, the EU is expected to respond—though carefully. The risk of further economic strain makes both sides cautious, as the outcome could affect not just trade, but global financial stability.
