In a dramatic turn in trade relations,former President Trump has proposed a significant escalation in tariffs against the European Union (E.U.). On Friday, he announced via social media his intention to impose a “straight 50% tariff on the European Union, starting on June 1, 2025.”
Trump stated, “The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with.” He cited “powerful trade barriers, VAT taxes, ridiculous corporate penalties, non-monetary trade barriers, monetary manipulations, unfair adn unjustified lawsuits against Americans companies, and more,” as reasons for a trade deficit exceeding $250 billion annually, deeming it “totally unacceptable.” He also claimed that discussions with the E.U. were “going nowhere!”
Trump reiterated his stance that “There is no tariff if the product is built or manufactured in the United States.” this echoes his broader “America First” trade policy.
U.S. Treasury Secretary Scott Bessent expressed hope that Trump’s tariff threat would reignite negotiations with the E.U., which he believes have been progressing too slowly.
“I would hope this would light a fire under the E.U.,” Bessent stated. He also suggested that individual countries within the E.U. might not be fully aware of the details being negotiated on their behalf by the central group in Brussels.
Trump’s earlier “Liberation Day” tariffs, announced on April 2, included a 10% blanket tariff on nations doing business with the U.S., along with additional “reciprocal” tariffs for some, including a 20% tariff on the E.U.
Ursula von der Leyen, president of the european Commission, responded with a strong statement, calling the proposed tariffs “a blow to the world economy” and promising countermeasures.
“We are in this together. If you take on one of us, you take on all of us. Europe stands together for our businesses, for our workers and for all Europeans,” von der Leyen declared, while also expressing a desire to move “from confrontation to negotiation.”
The E.U. previously voted to retaliate against some of Trump’s tariffs, but these discussions were paused when Trump announced a 90-day reprieve on most “reciprocal” charges. This pause is set to expire on July 9. The new threat of a 50% tariff starting June 1 has reignited tensions, and the markets have reacted negatively.
Shortly after Trump’s announcement, maroš Šefčovič, Commissioner for Trade and Economic Security at the European Commission, reported discussions with Trump’s Secretary of Commerce, Howard Lutnick, and the U.S. Trade Representative Jamieson Greer.
“The E.U.’s fully engaged, committed to securing a deal that works for both. E.U. remains ready to work in good faith,” Šefčovič stated, reiterating the E.U.’s preference for negotiation over confrontation. “E.U.-U.S. trade is unmatched and must be guided by mutual respect, not threats.”
Despite expressing a desire for negotiation, Šefčovič concluded with a firm message: “We stand ready to defend our interests,” signaling the E.U.’s willingness to retaliate if necessary.
The E.U. is a major trading partner for the United States and is considered the largest trading bloc globally.
Later that Friday, Trump defended his proposed tariff, citing the U.S. goods trade deficit with the E.U., which, according to U.S. Commerce Department data, amounted to $235.6 billion in 2024.
“I’m not looking for a deal,” Trump told reporters. “We’ve set the deal-its at 50%.”
Europe reacts to the prospect of a 50% tariff
European political and business leaders are preparing for the potential consequences of the proposed tariffs.
Hakan Samuelsson, CEO of Volvo Cars (based in Sweden), stated that the tariffs would limit the company’s ability to sell certain vehicles in the U.S. (such as those made in Belgium) and that customers would likely bear a significant portion of the increased costs. However, he expressed optimism that a deal would be reached, stating, “It could not be in the interest of Europe or the U.S. to shut down trade between them.”
Micheál Martin, the Irish Taoiseach (prime Minister), described trump’s announcement as “enormously disappointing” and emphasized his belief that “tariffs are damaging to all sides.”
Trump’s Proposed 50% Tariff on the EU: An Expert’s Take
time.news sits down with renowned trade economist, Dr. Anya Sharma, to unpack the potential implications of former President Trump’s proposed 50% tariff on goods from the European Union.
Time.news: Dr. Sharma, thanks for joining us. This proposed 50% tariff on the EU has certainly made headlines. What’s yoru initial reaction?
Dr. Sharma: It’s a notable escalation,there’s no doubt whatsoever. Trump’s proclamation via social media to impose this “straight 50% tariff on the European Union” starting June 1st raises serious concerns about the future of U.S.-EU trade relations. [2] It’s a bold move that could have far-reaching economic consequences.
Time.news: Trump says the EU has been “taking advantage of the United States on TRADE,” citing a $235.6 billion goods trade deficit in 2024 and various trade barriers. Is there merit to these claims?
Dr. sharma: While a trade deficit indeed exists – around $235.6 billion according to the U.S. Commerce department – it’s a complex issue.Trump highlights trade barriers, VAT taxes and other penalties imposed on organizations in America. Trade deficits aren’t inherently bad; they can indicate strong consumer demand. However, Trump’s core focus is stemming such imbalances and ensuring organizations manufacture and develop goods within the US borders to decrease the trade deficit. the real issue here is fairness and perceived imbalances in the trading relationship wich he aims to rectify with this aggressive tariff strategy.
Time.news: What specific sectors do you think would be most affected by a 50% tariff?
Dr. Sharma: Virtually all sectors importing goods from the EU would feel the pinch. European political and business leaders are certainly bracing themselves. Specifically, industries like automobiles, machinery, and agricultural products would face significant cost increases. Hakan samuelsson, CEO of Volvo Cars, already noted this, stating it would significantly limit volvo’s ability to sell vehicles made in belgium within the US given customers would likely bear the costs [3]. The smartphone industry would also likely be hit either from these tariffs, or Trump may impose a 25% tariff as penalty unless the products are made in America [3] .
Time.news: The announcement has led to strong reactions from Europe. Ursula von der Leyen,President of the European Commission,called the proposed tariffs “a blow to the world economy.” how likely is retaliation from the EU?
Dr. Sharma: Very likely. The EU has previously voted to retaliate against some of Trump’s earlier tariffs, signaling their willingness to defend their interests. Maroš Šefčovič, Commissioner for Trade and Economic Security at the European Commission, stated the EU is ready to “defend our interests,” indicating potential countermeasures. The EU views itself as acting collectively; an attack on an individual member is considered an attack on the entire bloc. Any tit-for-tat tariff war would harm both economies.
Time.news: U.S. Treasury Secretary Scott Bessent hopes this threat will “light a fire under the E.U.” and reignite negotiations. Do you think this is a sound strategy?
Dr. Sharma: It’s a high-risk gamble. While it might force the EU back to the negotiating table, it could also backfire, leading to a full-blown trade war. A more measured approach, focusing on specific areas of disagreement and building trust, would likely be more productive in the long run. Rhetoric is likely to escalate given Trump has proclaimed he is “not looking for a deal…it’s at 50%.”
Time.news: Trump has repeatedly stated, “There is no tariff if the product is built or manufactured in the United States.” What does this mean for companies currently operating in Europe and exporting to the U.S.?
Dr. Sharma: This echoes his “America First” trade policy and signals a push for reshoring manufacturing jobs. Companies will need to seriously re-evaluate their supply chains and consider moving production to the United States to avoid the tariffs. This could lead to significant investment in U.S. manufacturing but also disruption and job losses in Europe. The “Expert Tip” included in the article highlights the crucial need of re-evaluating manufacturing locations to dodge tariffs, a move many organizations may need to follow.
Time.news: What advice would you give to businesses navigating this uncertain trade landscape, notably small and medium-sized enterprises (SMEs)?
Dr. Sharma: SMEs need to act proactively. first, diversify your supply chains to reduce reliance on any single market. Second, thoroughly analyze the potential impact of the tariffs on your specific products and margins. Third, explore alternative markets and trade agreements. engage with industry associations and government agencies to stay informed and advocate for policies that support your business. Micheál Martin, the Irish Taoiseach, describes Trump’s announcement as “enormously disappointing” adding “tariffs are damaging to all sides”. It could not be in the interest of the EU or the US to shut down trade between them.
Time.news: Dr. Sharma, thank you for sharing your insights with us. This is a developing situation, and we’ll continue to follow it closely.
Dr.Sharma: My pleasure. It’s crucial for businesses and consumers to stay informed during this period of trade uncertainty.
