Trump’s tariff threat escalates transatlantic trade dispute with the European Union

A deepening trade rift between Washington and Brussels.

U.S. President Donald Trump speaks in the Oval Office of the White House on May 23, 2025, in Washington, DC. Photo by Win McNamee/Getty Images

By Clarisa Sendy and Alana Salsabila

In a major escalation of economic tensions, President Donald Trump announced on Friday that he plans to slap a sweeping 50 percent tariff on European Union imports, effective June 1. The move, which Trump revealed in a Truth Social post, signals a dramatic shift in the United States’ trade posture toward one of its largest commercial partners.

The decision has thrown months of diplomatic negotiations into disarray, prompting concern among EU officials and analysts alike. Trump justified the impending tariffs by accusing the EU of maintaining a litany of trade barriers—including taxes, corporate regulations, and other policies—that he claims create an unfair playing field for American businesses. The Trump EU tariffs announcement has sparked fears of a full-scale trade war between the two economic giants.

“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,” Trump wrote. “Our discussions with them are going nowhere!”

Trump shifts tone as negotiations stall

European officials have been attempting to negotiate with the Trump administration using established trade norms, emphasizing mutual benefit and historical alliances. But Trump’s confrontational tone and aggressive demands suggest a stark departure from traditional diplomatic engagement. According to insiders familiar with the talks, American negotiators are less interested in compromise and more intent on extracting unilateral concessions.

Since his return to the political stage, Trump has made no secret of his dissatisfaction with the EU's trade conduct. Previous rounds of tariffs under his administration targeted steel, aluminum, and automobiles. In April, Trump had temporarily paused further escalation, allowing a 90-day window for negotiations—but this latest announcement suggests that pause is effectively over.

If enacted, the 50 percent tariffs on EU imports would more than double the rate the EU had been bracing for. European policymakers had expected a hike to 20 percent after the pause expired in July—not a jump to 50 percent a month earlier.

EU proposes solutions, Washington demands more

EU trade officials, including Trade Commissioner Maros Sefcovic, have proposed what they termed “win-win” trade solutions. These include eliminating tariffs on industrial goods and increasing purchases of American natural gas. However, the Trump administration has reportedly dismissed these offers as insufficient.

White House sources say they are expecting what they call “one-way” deals—concessions by the EU without reciprocal changes on the American side. U.S. Treasury Secretary Scott Bessent underscored this sentiment during a Fox News appearance, stating that the EU’s proposals “have not been of the same quality” as those from other U.S. trading partners.

“It is just a take,” one diplomat said of the U.S. negotiating stance.

In a sign of increasing frustration, Sefcovic warned on Friday that the EU would not be intimidated. He later posted on social media, saying: “EU-US trade is unmatched & must be guided by mutual respect, not threats. We stand ready to defend our interests.”

Trump reshapes U.S.-Europe relations

The growing trade standoff is part of a broader redefinition of the U.S.-Europe relationship under Trump’s leadership. Beyond tariffs, Trump has criticized European defense spending, cast doubt on NATO commitments, and scaled back support for Ukraine amid its war with Russia.

Trade, however, has become the central battleground. Trump is pressuring the EU to scrap its Value-Added Tax (VAT) system, a consumption tax integral to European economies. American officials have also demanded looser food safety standards to allow more U.S. beef imports—demands the EU flatly rejects.

Digital policy has become another flashpoint, with the U.S. expressing dissatisfaction with European regulations targeting major American tech firms. These demands have further strained talks, with EU officials unwilling to bend on long-established regulatory principles.

Transatlantic commerce at stake

Despite the political conflict, the economic interdependence between the U.S. and EU remains massive. According to EU estimates, nearly $5 billion in goods and services are traded across the Atlantic every day. While Europe has a goods trade surplus of approximately $180 billion with the U.S., it imports more American services than it exports.

European negotiators have tried to leverage this balanced relationship, believing the sheer scale of trade provides bargaining power. But Trump appears unmoved by those metrics. He has pointed instead to individual sector imbalances and regulatory differences as proof of unfair treatment.

Howard Lutnick, the U.S. commerce secretary, dismissed European efforts during an Axios event earlier this week, saying, “There are some countries that are impossible, like the European Union.”

EU prepares countermeasures

Faced with the possibility of severe tariffs, the EU is preparing two waves of countermeasures. If the U.S. implements the 50 percent duties, the EU plans to retaliate with tariffs on American goods totaling up to 95 billion euros. These levies could affect products such as bourbon, soybeans, and Harley-Davidson motorcycles—industries with significant political clout in the U.S.

But while these measures are designed to inflict pain, their real purpose may be to bring Washington back to the table. EU officials hope that the threat of countertariffs and the economic blowback of a trade war might lead the Trump administration to reconsider its hardline approach.

“There is some serious daylight between the E.U.’s expectations of what it can achieve in these talks and what the U.S. administration is willing to give,” said Jörn Fleck, senior director at the Atlantic Council’s Europe Center.

What comes next?

As the June 1 deadline approaches, uncertainty hangs over transatlantic commerce. The EU had hoped the post-April pause would lead to lower tariffs—potentially even below the current 10 percent baseline. Instead, they now face a punitive spike that could disrupt everything from pharmaceuticals to automobiles.

If no deal is reached, the EU could soon find itself not only facing record-high tariffs, but also being pushed to abandon longstanding policies on taxation, food safety, and digital regulation.

“The president will decide if they’ve made us an offer worthy of modifying their tariff terms,” Lutnick said this week. “If they haven’t, the president will write them a letter saying, ‘Dear country A, we deeply appreciate doing business with you. Here’s your tariff rate.’”

And, he added, “There will be no floor below 10.”

Whether Trump’s 50 percent tariff threat is a real policy move or merely a pressure tactic remains to be seen. But for now, the Trump EU tariffs announcement has set off a chain reaction in both Washington and Brussels—with global markets and supply chains hanging in the balance.

More on Trump’s tariffs

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• EU holds off retaliation against Trump tariffs ahead of NATO Summit