Trump Pushes EU for Tariff Reductions, Threatens New Trade Penalties

Trade tensions between the United States and the European Union are heating up as former U.S. President Donald Trump’s administration continues to pressure Brussels to cut tariffs on American products. The White House has warned that failure to comply could lead to further U.S. trade tariffs on key European exports.

U.S. Demands Unilateral Tariff Cuts from EU

According to reports by the Financial Times, U.S. Trade Representative is set to inform EU Commissioner  that the bloc’s latest trade proposal does not align with Washington’s expectations. The United States is particularly frustrated that the EU is only offering mutual tariff reductions, rather than the unilateral cuts that the Trump administration is seeking.

In addition, U.S. negotiators are unhappy with the EU’s reluctance to include digital taxation policies in the trade talks. Washington has long criticised European digital services taxes, claiming they disproportionately target American tech firms.

Negotiations Stalled Despite 90-Day Trade Window

Trade discussions have made little progress since the White House initiated a 90-day negotiation period, with both parties exchanging draft agreements but failing to reach consensus on key issues. The talks have been complicated by differing priorities and entrenched positions on tariff policy, digital taxation, and regulatory standards.

Current Tariffs and Future Threats

The U.S. has already imposed a 20% tariff on most EU imports, although this rate has been temporarily halved until 8 July to allow room for negotiations. Meanwhile, 25% tariffs remain in place on European steel, aluminium, and car parts, with additional duties under consideration for sectors such as pharmaceuticals, semiconductors, and consumer goods.

U.S. trade officials are also demanding the elimination of national digital taxes, broader acceptance of American food and product standards, and the loosening of investment restrictions across EU member states.

EU Responds with Countermeasures and Conditions

In response, the European Union has expressed a willingness to negotiate on certain areas, including:

• Mutual recognition of regulatory standards

• Food and agriculture trade facilitation

• Commitments to labour rights and environmental protections

While the EU has paused tariffs on €23 billion worth of U.S. goods as a goodwill gesture during negotiations, it has also prepared a new list of potential retaliatory tariffs covering €95 billion of American exports. This includes high-profile goods such as aircraft, Bourbon whiskey, and other politically sensitive products.

Outlook Remains Uncertain as Trade Talks Continue

The widening rift between the two sides raises concerns about a potential escalation in the transatlantic trade dispute. With major sticking points unresolved—particularly over digital taxes and food regulations—the risk of a new round of tariffs remains high.

(Sources: investing.com, reuters.com, ChatGPT)