The EU has expressed its willingness to finalize a deal with the US to avoid severe tariffs, following President Donald Trump’s remarks that cast doubt on the possibility of an agreement.
“We are fully prepared to conclude an agreement with the US,” stated EU trade spokesman Olof Gill to reporters.
“Let’s see what unfolds when our friends in Washington wake up in a few hours.”
This week, it seemed likely that Brussels and Washington would swiftly finalize a deal to avert the re-imposition of 20% tariffs or even higher.
Donald Trump has extended the deadline for reaching a deal until August 1
Instead, President Trump pushed back the deadline for tariffs to be applied again for several trading partners to August 1, moving it from July 9.
Things took a turn yesterday when he informed NBC that the EU would receive a letter detailing new tariffs “today or tomorrow”.
Mr. Gill assured reporters that the EU was “prepared for all scenarios”.
“We are in close communication with our member states and industry to ensure that whatever strategy we adopt – whether it’s Plan A, B, C, D, or E – is suitable for the EU,” he added.
The EU had set up retaliatory duties on US goods valued at approximately €21 billion following Trump’s imposition of 25% tariffs on steel and aluminum imports earlier this year, but these are currently on hold until July 14.
The EU has not yet taken steps to extend the hold on these tariffs but could do so promptly if necessary.
“If a political decision is made to extend the suspension, we can do that without difficulty,” Mr. Gill said.
Trump considers 35% tax on Canada, up to 20% for others
Donald Trump announced that the US will impose higher tariffs on Canada, setting a 35% tax on imports starting next month, while also planning to levy blanket tariffs of 15% or 20% on most other trading partners.
In a letter shared on his social media platform, Mr. Trump informed Canadian Prime Minister Mark Carney that the new rate would take effect on August 1 and could increase if Canada retaliated.
In a post on X yesterday, Mr. Carney stated that his government would continue to advocate for Canadian workers and businesses during negotiations with the US as they approach the deadline.
The 35% tariff is an increase from the existing 25% rate assigned to Canada and poses a setback for Mr. Carney, who was aiming for a trade pact with Washington.
During the ongoing trade negotiations with the United States, the Canadian government has consistently defended our workers and businesses. We will maintain this stance as we aim for the revised deadline of August 1.
Canada has made significant strides to combat the issue…
— Mark Carney (@MarkJCarney) July 11, 2025
An exclusion for goods covered under the United States-Mexico-Canada Agreement (USMCA) was expected to remain in place, and 10% tariffs on energy and fertilizers were also not anticipated to change, although Mr. Trump had yet to make a final decision on these matters, according to an administration official.
Mr. Trump expressed concerns in his letter regarding what he termed the flow of fentanyl from Canada, along with the country’s tariff and non-tariff barriers affecting US dairy farmers and others.
He pointed out that the trade deficit posed a threat to both the US economy and national security.
“If Canada collaborates with me to halt the flow of fentanyl, we may consider adjusting this letter,” Mr. Trump wrote.
Canadian officials have stated that only a minuscule amount of fentanyl originates from Canada, yet they have taken steps to enhance border security.
“Canada has made significant progress to combat the fentanyl crisis in North America. We are dedicated to continuing our collaboration with the United States to save lives and safeguard communities across both nations,” Mr. Carney reiterated in his post on X, formerly Twitter, late on Tuesday.
The Prime Minister stated last month that he and Mr. Trump had agreed to finalize a new economic and security deal within 30 days.
Expanded trade conflict
In recent days, Mr. Trump has widened his trade conflict, imposing new tariffs on several nations, including allies Japan and South Korea, as well as a 50% tariff on copper.
His latest actions have unsettled investors once again, with US and European stock futures declining in Asia as markets anxiously awaited details on the tariffs Trump would impose on the European Union later today.
The potential escalation between the EU and the US is significant for financial markets,” stated Joseph Capurso, head of international economics at the Commonwealth Bank of Australia.
“If a situation similar to the US-China trade war in April occurs, it could be very destabilizing.”
In an interview with NBC News released yesterday, Mr. Trump noted that other trading partners who had not received such letters would likely face blanket tariffs.
“Not everyone needs to receive a letter. You understand that. We’re just establishing our tariffs,” Mr. Trump mentioned during the interview.
“We’re going to say that all remaining countries will incur tariffs, whether it’s 20% or 15%. We’ll sort that out now,” Mr. Trump was quoted as saying by the network.
Myanmar’s ruling military general has requested Mr. Trump to lower the 40% tariff rate on exports from his country to the US to between 10-20%, and is ready to send a negotiation team to Washington if required, according to state media.
The president of the Philippines is set to meet Mr. Trump in Washington this month for their first encounter to discuss a 20% tariff, as stated by the country’s foreign minister.
Canada ranks as the second-largest trading partner of the US after Mexico and is the primary buyer of US exports. It purchased $349.4 billion worth of US goods last year while exporting $412.7 billion to the US, according to data from the US Census Bureau.
Mr. Carney, who led his Liberal Party to a strong election victory earlier this year with a promise to address trade issues with the US, had aimed to negotiate a trade deal with its key partner by July 21.
In his letter, Mr. Trump did not specifically mention how trade negotiations were progressing but indicated that “tariffs may be adjusted, whether upwards or downwards, based on our relationship with your country”.
Last month, the Carney government abandoned a proposed digital services tax targeting US technology companies after Mr. Trump abruptly ended trade talks, labeling the tax a “blatant attack”.
