Trump demands more trade concessions as EU delays tariff retaliation

The European Union is buying precious time to avoid a damaging transatlantic trade war. Brussels announced on Sunday it will extend its pause on retaliatory tariffs against the United States until early August, as negotiators race to strike a deal that could head off sweeping new import duties threatened by US President Donald Trump. According to Reuters, Trump warned he would impose a 30 per cent tariff on most EU and Mexican imports starting August 1. That threat leaves less than three weeks for negotiators to work out so-called “framework” agreements that could reduce or postpone the punitive measures.

White House economic adviser Kevin Hassett made clear on Sunday that Trump is not satisfied with the concessions offered so far. “The president thinks that deals need to be better,” Hassett told ABC’s This Week, as quoted by Reuters. “And to basically put a line in the sand, he sent these letters out to folks, and we’ll see how it works out.”

Brussels pushes for talks over retaliation

European Commission President Ursula von der Leyen, whose executive body handles trade policy for the 27-member bloc, said the EU would maintain its “two-track approach” of continuing negotiations while preparing retaliatory measures in case talks break down.

“We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now,” von der Leyen told a press conference on Sunday, according to Reuters.

Her decision to delay retaliatory tariffs underscores the EU’s aim to avoid a tit-for-tat escalation that could deal a heavy blow to its export-dependent economies, especially Germany.

EU leaders debate strategy as deadline nears

But the looming August 1 deadline is exposing differences within the EU over how hard to push back. German Chancellor Friedrich Merz sounded a conciliatory note in an interview with ARD television, saying he was “really committed” to finding a solution with Washington and warning that a 30 per cent tariff would “interfere with everything and hit the German export industry to the core.”

By contrast, French President Emmanuel Macron urged the EU Commission to show “determination to defend European interests resolutely” and said retaliation might need to involve the bloc’s so-called anti-coercion instruments. German Finance Minister Lars Klingbeil also signalled a tougher line if talks fail. “If a fair negotiated solution does not succeed, then we must take decisive countermeasures to protect jobs and companies in Europe,” Klingbeil told Sueddeutsche Zeitung, as reported by Reuters.

Billions in tariffs on standby

While Brussels has so far held off on hitting back, it has prepared two large tariff packages targeting up to €93 billion worth of US goods, Reuters reported. A first package, in response to Trump’s 50 per cent tariffs on imported steel and aluminium, would target €21 billion in US exports. That retaliation had been suspended in April for 90 days to allow negotiations, and the pause was set to expire on Monday before the EU announced its extension.

A second package, designed to counter Trump’s planned “reciprocal” tariffs, has been in development since May and would target up to €72 billion in US goods. The full list of products hasn’t been made public yet and will need formal approval by member states.

Countdown to a high-stakes deadline

The next few weeks will be critical in determining whether the EU and US can avoid a damaging new escalation in their long-running trade tensions. Trump’s tariff threats are part of a broader push to force trading partners to cut trade deficits with the US, an approach that has repeatedly rattled allies.

For now, the EU is betting on diplomacy while quietly preparing its own arsenal of countermeasures. As von der Leyen put it, Europe still wants a deal but it’s getting ready for the worst.