Description: Donald Trump’s tariff threats of 30% have rallied European economic leaders to conceptualize and fast – track a strategy approaching the current trade negotiations with the US. European Trade Chief, Maros Sefcovic has stated that there was still place for reaching a potential mutually beneficial agreement with the US while other EU leaders, such as Danish Foreign Minister Lars Lokke Rasmussen labeled the tariff threats as totally unacceptable. EU Commission Chief, Ursula von der Leyen, remained moderate and stated that EU would refrain from imposing retaliatory measures, however, the bloc of countries was reportedly ready to retaliate if negotiations failed. German Chancellor Friedrich Merz stated that Germany would be one of the most impacted countries by the tariffs and urged other EU leaders to expedite the negotiations and conclude a comprehensive trade deal with the US. Trump extended the tariff imposition deadline to 01 Aug, which he stated was the last extension for reaching trade deals globally.
Impact: The EU – US trade negotiations highlight the ever-persistent internal divisions within the EU and further emphasize that countries are adopting independent approaches towards protecting their national interests on the expense of the Union’s economic and trade prospects. Trump continues to conduct conditioned and unilateral foreign policy, forcing allied countries to agree towards unrealistic concessions in return for potentially stable strategic ties with the US. Negotiations are evidently stalled for the time being with no indications of any breakthrough possibilities which signals further deterioration of relations between the US and the EU. The EU could potentially push for some form of an informal agreement before the 01 Aug deadline, effectively extending the negotiation period and ensuring the final trade agreement is not damaging to the Union’s trade and economic interests. In case the negotiations continue to stall, Trump might also consider unilaterally extending the negotiations deadline since the US couldn’t potentially risk losing its largest trading partner.