The European Union is not yielding to Trump’s demands, prompting the US president to threaten 50% tariffs on imports from 1 June 2025. Trump made the statement on his social media platform Truth on 23 May, claiming that current talks between the US and the EU are failing to deliver results. According to Trump himself, his demands go well beyond the issue of tariffs. He criticised what he described as “powerful trade barriers, VAT charges, ridiculous corporate sanctions, non-monetary trade barriers, currency manipulation and unfair and baseless lawsuits against American companies”. In short, Washington believes that the EU should eliminate VAT, lift sanctions on US multinationals that circumvent tax and privacy laws, and halt legal actions against those same companies.
The first casualties of these statements appear to be American businesses. Following the social media posts, S&P 500 futures dropped by 1.1% while Nasdaq 100 futures fell by 1.3%, according to Bloomberg. However, reports from the negotiations suggest that Brussels has shown signs of willingness to engage with Washington. Bloomberg noted that “the new framework includes proposals that reflect US interests, such as international labour rights, environmental standards, economic security and a gradual mutual reduction to zero of tariffs on non-sensitive agricultural products and industrial goods”.
The agency further reported that “the proposal also outlined areas where the United States and the European Union could collaborate, such as mutual investments and strategic procurement in sectors like energy, artificial intelligence and digital connectivity”. Despite these developments, this does not seem to be enough, as Commerce Secretary Howard Lutnick stated on 21 June that some trade negotiations had proven to be “impossible”.
Brussels’ response to Trump’s threat is now awaited. Even before it was formally issued, the Union had already prepared measures in case the negotiations failed to yield a satisfactory outcome. The plan aims to target US exports worth 107 billion dollars (95 billion euros) with additional tariffs in response to Trump’s “reciprocal” levies and his 25% tariffs on cars and certain components. At the beginning of May, the European Commission postponed the implementation of these measures by ninety days.
