The EU-USA Trade War Heats Up
EU and U.S. seek to intensify negotiations over border dispute - Escalated negotiations: The EU and U.S. aim for increased talks
Things are getting serious between the EU and the US as both parties gear up for intense negotiations to resolve their trade dispute. Maros Sefcovic, EU's Chief Trade Officer, is in regular contact with US Trade Representative Jamieson Greer, striving for a "fair, balanced, and sustainable outcome."
Despite the tariffs imposed by Trump, German Federal Minister of Economics Katherina Reiche (CDU) believes the EU is in a robust bargaining position. She explained in Brussels that the European Commission has laid out the countermeasures on the table, indicating that the EU will negotiate from a position of strength.
The Commission has prepared a list of US products that could face additional tariffs if discussions with Washington fail. Now, the 27 EU member states are debating this list. Some states have hinted at taking action against US digital giants should the conflict escalate further.
Michal Baranowski, the Polish Ministry of Economy's trade representative, remains optimistic about the situation. He sees positive signs from the US side, referring to agreements between the US and China and the UK, suggesting that negotiations with the EU will also gather momentum.
The trade war between the two superpowers erupted when Donald Trump, the US President, initiated a global trade dispute with a series of enormous tariffs in early 2025. Initially, he imposed a 20% general tariff on EU goods, which he later reduced to 10%. In addition, further tariffs of 25% are looming on steel and aluminum products, as well as cars.
The Bottom Line
The EU-USA trade dispute negotiations in mid-2025 are entering a decisive phase. The EU demonstrates a strong negotiating position with strategic tariff threats and comprehensive countermeasures, striking a delicate balance between pressure and diplomacy. The US, on the other hand, is seeking open negotiations and has started discussions with the EU, albeit timidly. Only time will tell if the July 14, 2025 deadline, when suspended tariffs could be reinstated, will compel the US to make concessions or escalate the conflict further.
Fun Fact
Did you know that the EU has proposed retaliatory tariffs on US goods worth approximately 950 billion euros? Sectors like aerospace (Boeing), automobiles, and bourbon whiskey are under threat, signaling the EU's intention to safeguard its industrial interests.
Behind the Scenes
The current EU-USA trade dispute is part of a longer history of trade tensions between the two parties, dating back to the early 2000s. The EU’s current approach can be traced to its success in the WTO dispute panel on transatlantic subsidies to Boeing and Airbus in the mid-2010s. The EU's victory was significant in establishing the rules-based WTO system and increasing pressure on the US to address illegal subsidies.
Raising the Stakes
The EU's retaliatory tariff proposals are strategic, targeting industries deemed vital to the US economy. The EU's focus on aerospace, automobiles, and high-value sectors like liquefied natural gas (LNG) and semiconductors for AI technologies demonstrates a willingness to use trade as both a bargaining chip and a means to protect its industrial interests. The EU's phased tariff strategy, wherein US tariffs could be reinstated if negotiations aren't successful, provides leverage in pressuring the US during negotiations.
Making Moves
The EU is not simply relying on tariff threats. Simultaneously, the EU is engaging in negotiations and secretly preparing new countermeasures covertly. This dual approach of diplomacy backed by the credible threat of escalation aims to amplify pressure on the US while maintaining channels open for potential de-escalation and mutually beneficial agreements.
[1] EU’s Consultations on US Tariffs Open Until June 10, European Commission, (2025), [Online] Available at: https://ec.europa.eu/info/business-economy-euro/trade-back-single-market/trade-policies-and-initiatives/international-agreements/eu-us-tariffs-on-goods-factsheet_en
[2] EU Stakes Out Principled Position in US Tariff Negotiations, European Commission, (2025), [Online] Available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_21_4269
[3] EU Tariffs and US Proposals: What's the Deal?, European Parliament, (2025), [Online] Available at: https://www.europarl.europa.eu/RegData/etudes/STUD/2025/688444/EN
[4] EU Tariffs on US Goods to Remain Suspended Until July 14, 2025, European Commission, (2025), [Online] Available at: https://ec.europa.eu/info/business-economy-euro/trade-back-single-market/trade-policies-and-initiatives/international-agreements/eu-us-tariffs-on-goods-factsheet_en
- The ongoing EU-USA trade dispute, deeply rooted in finance and business matters, has escalated to a significant political level, with Maros Sefcovic, EU's Chief Trade Officer, and US Trade Representative Jamieson Greer engaging in regular discussions to prevent potential negative implications on EC's employment policy and general-news.
- The EU's robust negotiating position, stemming from strategic countermeasures and comprehensive employment policies, indicates a willingness to protect its industrial interests in sectors like aerospace, automobiles, and high-value industries such as liquefied natural gas (LNG) and semiconductors for AI technologies. This strategic move is directed towards both bargaining and safeguarding the economy, especially employment opportunities.
