Donald Trump’s threatened 30% tariffs on European goods would eliminate transatlantic trade, the EU’s chief negotiator with the US has said, while voicing hope that a deal remained possible.
Maroš Šefčovič, the EU trade commissioner, said a tariff of 30% or more would have a huge impact, making it “almost impossible to continue” current transatlantic trade, which is worth €4.4bn (£3.8bn) a day.
After talks with EU trade ministers in Brussels, Šefčovič said: “We want to use every day, every possibility and every minute until 1 August to find a negotiated solution.” It was very obvious from the talks with the ministers, he went on, that a 30% tariff rate was “absolutely unacceptable”.
In a letter published on social media on Saturday, the US president said that EU imports would face a tariff of 30% from 1 August, denting European optimism that talks to secure a still painful 10% duty were almost finalised.
In response to Trump’s latest deadline, the EU decided to postpone retaliatory counter tariffs on €21bn of US goods that had been due to kick in at midnight on Monday until 1 August.
Ministers also discussed plans for a further round of countermeasures, targeting €72bn of US imports to the EU, but did not reveal details.
Before Trump’s blunt announcement on social media, EU negotiators thought they were closing in on an agreement in principle, an outline deal that would set tariffs at 10%.
Speaking to reporters, Šefčovič expressed optimism an agreement could still be reached “otherwise you would not spend three months on drafting an agreement in principle and going through 1,700 tariff lines discussing all details from agriculture to the spare parts of cars if this [would just] be ended by one – even though – very, very important letter”.
Šefčovič, who is due to speak to US counterparts later on Monday, said he had been notified about Trump’s Truth Social letter “very shortly before” it was published.
Denmark’s foreign minister, Lars Løkke Rasmussen, who chaired the talks, said Europe did not want a trade war with the US, which would be “devastating” for both sides. “We don’t want to escalate things then, on the other hand, we also need to flash some muscles,” he said.
Rasmussen, the former Danish prime minister, rejected suggestions that the EU needed a new approach. “I don’t believe in the idea of escalating to de-escalate,” he said, insisting there was “a total unified approach among ministers that we should be ready to respond if needed”.
Over the weekend the French president, Emmanuel Macron, called for an acceleration of preparations on countermeasures and said the EU should be ready to use its untested “anti-coercion instrument”, a law to impose punitive measures on a country seen to be using trade as a weapon.
After the German chancellor, Friedrich Merz, said a 30% tariff would “hit the German export industry to the core, the German Chamber of Commerce and Industry told Reuters on Monday that continued uncertainty about Trump’s tariff policy could reduce Germany’s exports to the US by almost €1bn a month.
Merz has called for a “pragmatic” response, while Italy has warned against a trade war. Countries in central and eastern Europe are also concerned that countermeasures could trigger a withdrawal of US military support in Europe.
Lithuania’s foreign minister, Keṣtutis Budrys, said the EU had to avoid escalation, citing “geoeconomic challenges” and “the issues that we have to solve together with the US, like fentanyl”.
Trump has accused Canada and Mexico of not doing enough to combat flows of the opioid into the US, although the issue is not known to have been a feature of EU-US trade talks.
While the UK is one of the few countries to have reached a trade deal with the US, it is not immune from any economic downturn in the EU, its largest trading partner.
Matthew Allen, a lecturer in economics at the University of Salford, said that UK consumers and businesses would face “significant ripple effects” because of close ties to EU supply chains.
“Many British firms import components and goods from the EU that are later exported to the US, meaning UK businesses could be indirectly hit by this tariff hike,” he said.