The European Commission has called on the US to prioritize respect over threats in trade negotiations, following President Donald Trump’s proposal for a 50% tariff on EU goods.
EU trade chief Maroš Šefčovič emphasized the European Union’s commitment to reaching a mutually beneficial agreement during discussions with US Trade Representative Jamieson Greer and US Commerce Secretary Howard Lutnick.
President Trump suggested increasing tariffs on EU imports starting June 1.
Mr. Šefčovič noted that the European Commission, which manages trade policy for the bloc of 27 nations, stands ready to engage in good faith negotiations.
Major stock indices dropped, the dollar weakened against other currencies, and the euro lost ground following Mr. Trump’s announcement regarding EU tariffs and a potential 25% duty on Apple iPhones produced outside the US.
“With Trump, there’s always an element of uncertainty, but this would represent a significant escalation,” remarked Holger Schmieding, chief economist at Berenberg.
“The EU would need to respond, and this could seriously harm both the US and European economies.”
President Trump recommended that increased tariffs on the EU be implemented starting June 1.
The tariff threat surfaces as negotiations stall, with the US insisting on unilateral concessions from Brussels to welcome US businesses, while the EU aims for an agreement that offers advantages for both parties, according to sources familiar with the discussions.
EU leaders and ministers expressed general support for the European Commission’s position following Mr. Trump’s announcement.
Taoiseach Micheál Martin stated that any action on Trump’s threat would be “very damaging.”
While speaking in Cork, Mr. Martin asserted that “everyone in the EU is acting in good faith and desires a negotiated resolution with the United States,” highlighting that the trade relationship between the EU and the US is “the most dynamic in the world.”
Tánaiste Simon Harris emphasized that Ireland and the EU must remain focused on reaching a “negotiated settlement” on the matter.
In a statement, the Minister for Foreign Affairs and Trade reiterated that the Government has consistently stated the need for a “substantive, calm, measured, and comprehensive dialogue” with the US regarding tariffs.
Mr. Harris pointed out that tariffs are “harmful to Ireland, the EU, and the US” as they would inevitably “raise prices for consumers and businesses,” calling for a rational response to the situation.
“A negotiated solution remains very clearly the goal and the preferred outcome,” stated the Tánaiste.
Micheál Martin described Donald Trump’s tariff threat as an unexpected development.
Polish deputy economy minister Michal Baranowski, representing the country currently holding the rotating EU presidency, characterized the tariff threat as potentially a negotiating tactic.
“The European Union and the United States are in negotiations,” he commented to reporters during a Brussels meeting, adding that discussions might continue into early July.
“The presence of significant statements in the public sphere doesn’t necessarily mean they will result in actions from the US administration,” he stated.
Dutch Prime Minister Dick Schoof affirmed that the EU would adhere to its chosen course.
“We’ve seen tariffs fluctuate during talks with the US,” he told reporters in The Hague.
The EU is already subject to 25% US import tariffs on steel, aluminum, and cars, along with so-called “reciprocal” tariffs of 10% on nearly all other goods, a levy that is expected to increase to 20% once Trump’s 90-day grace period concludes on July 8.
French Trade Minister Laurent Saint-Martin remarked that Mr. Trump’s latest threats offer no constructive input for negotiations.
“We continue to advocate for de-escalation, but we are prepared to respond,” he posted on X.
Diverging agendas have emerged.
Recently, the US presented Brussels with a list of demands aimed at reducing the US trade deficit with the European Union, including addressing non-tariff barriers such as adopting US food safety standards and abolishing national digital services taxes, according to sources familiar with the documentation.
In response, the EU proposed a mutually beneficial agreement that could involve both parties moving toward zero tariffs on industrial goods, the EU potentially increasing imports of liquefied natural gas and soybeans, and collaborating on issues such as steel overcapacity, which both parties attribute to China.
The Šefčovič-US call was arranged as a follow-up to these discussions and in anticipation of a potential meeting in Paris in early June.
Robert Sockin, a senior global economist at Citigroup, expressed his belief that Mr. Trump is attempting to compel the EU to negotiate.
“With a 50% tariff, Europe would be forecasted into recession, but I am skeptical it would actually be implemented,” he stated.
The US claims the tariffs aim to correct the nearly €200 billion ($226.48 billion) goods trade deficit it had with the European Union last year, according to data from the EU statistics agency Eurostat.
However, the United States does maintain a significant trade surplus with the EU in services.
The European Commission has consistently stated that it prefers a negotiated resolution but is prepared to consider countermeasures if negotiations break down.
The bloc previously imposed, then suspended, duties on €21 billion worth of annual US imports in response to the US metals tariffs and has compiled a list of €95 billion in US goods as potential countermeasures against US ‘reciprocal’ and car tariffs.
