The European Commission has urged the US to approach trade talks with respect rather than threats, following President Donald Trump’s call for a 50% tariff on EU goods.
EU trade chief Maroš Šefčovič emphasized that the European Union is dedicated to achieving a mutually beneficial deal during discussions with US Trade Representative Jamieson Greer and US Commerce Secretary Howard Lutnick.
President Trump suggested that the higher tariffs on the EU could start on June 1.
Mr. Šefčovič noted that the European Commission, which manages trade policy for the 27-nation bloc, is prepared to engage in good faith negotiations.
In response to Mr. Trump’s tariff announcement, major stock indices fell, the dollar weakened against key currencies, and the euro slightly retreated.
“With Trump, the unpredictability is high, but this would represent a significant escalation,” stated Holger Schmieding, chief economist at Berenberg.
“The EU would have to respond, and this could severely impact both the US and European economies.”
President Trump suggested implementing higher tariffs on EU goods starting June 1.
This tariff threat arises amidst stalled talks, with the US demanding unilateral concessions from Brussels to facilitate US business, while the EU aims for a more balanced agreement, according to sources familiar with the discussions.
EU leaders and ministers who commented after Mr. Trump’s announcement largely supported the European Commission’s stance.
Taoiseach Micheál Martin stated that it would be “very damaging” if the US president acts on his threat.
In Cork, Mr. Martin remarked that “everyone in the EU is acting in good faith and seeks a negotiated settlement with the United States,” highlighting the trading relationship between the EU and US as “the most dynamic in the world.”
Tánaiste Simon Harris mentioned that Ireland and the EU must remain focused on achieving a “negotiated settlement” regarding tariffs.
In a statement, the Minister for Foreign Affairs and Trade indicated that the Government has consistently emphasized a need for “substantive, calm, measured, and comprehensive dialogue” with the US about tariffs.
Mr. Harris pointed out that tariffs are “detrimental to Ireland, the EU, and the US,” as they would inevitably “increase costs for consumers and businesses,” and he urged for a sensible response to the situation.
“A negotiated solution remains the clear goal and preferred outcome,” the Tánaiste affirmed.
Micheál Martin expressed that Donald Trump’s tariff threat was unexpected.
Polish deputy economy minister Michal Baranowski, whose country currently holds the rotating EU presidency, suggested that the tariff threat seems to be a negotiating tactic.
“The European Union and the United States are in negotiations,” he remarked to reporters during a meeting in Brussels, adding that discussions could extend until early July.
“The public statements we observe don’t necessarily indicate imminent actions from the US administration,” he noted.
Dutch Prime Minister Dick Schoof asserted that the EU would adhere to the course it has chosen.
“We’ve observed that tariffs can fluctuate during discussions with the US,” he commented to reporters in The Hague.
The EU currently faces 25% US import tariffs on steel, aluminum, and cars, along with “reciprocal” tariffs of 10% on nearly all other goods, a levy that is set to increase to 20% after Mr. Trump’s 90-day pause ends on July 8.
French Trade Minister Laurent Saint-Martin remarked that Mr. Trump’s latest threats are not conducive to negotiations.
“We maintain the same stance: de-escalation, but we are prepared to respond,” he posted on X.
Differing Wishlist
In the past week, the US has provided Brussels with a list of demands aimed at reducing the US goods trade deficit. This includes requests related to non-tariff barriers, such as adopting US food safety standards and eliminating national digital services taxes, according to those familiar with the document.
The EU’s response has been to propose a mutually advantageous deal that could involve both sides moving toward zero tariffs on industrial goods, with the EU potentially increasing imports of liquefied natural gas and soybeans and collaborating on issues such as steel overcapacity, attributed to China by both parties.
The Šefčovič-US conversation was organized as a follow-up to these exchanges, with a possible meeting planned for early June in Paris.
Robert Sockin, a senior global economist at Citigroup, conveyed his belief that Mr. Trump is attempting to prompt the EU to the negotiation table.
“A 50% tariff could lead to a recessionary forecast for Europe, although I doubt it will be implemented,” he said.
The US argues that the tariffs aim to address the nearly €200 billion ($226.48 billion) goods trade deficit it has with the European Union, based on data from the EU statistics agency Eurostat.
Conversely, the United States does enjoy a significant trade surplus in services with the EU.
The European Commission has consistently stated its preference for a negotiated resolution but stands ready to implement countermeasures if talks collapse.
The bloc had instated and then suspended tariffs on €21 billion of yearly US imports in response to US metals tariffs and has compiled a list of €95 billion worth of US goods as potential countermeasures against US ‘reciprocal’ and car tariffs.
