EU Demands ‘Respect’ Amid Trump’s Escalating Tariff War Threat
The European Union has responded firmly to US President Donald Trump’s threat of a sweeping 50% tariff on all goods imported from the EU, calling for trade relations based on “respect, not threats.” The warning from Brussels highlights heightened tensions as the two major trading blocs remain far apart in ongoing trade negotiations.
The sharp rhetoric from President Trump, delivered via social media, signals potential significant escalation in the transatlantic trade relationship. Trump declared that trade talks with EU leaders were “going nowhere” and that Brussels was “difficult to deal with,” reiterating his plan for the elevated 50% duty to take effect from June 1st. This proposed rate is substantially higher than previous tariff levels discussed or implemented, including a 39% threat for April 2nd that was later scaled back.
In a statement following calls with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, EU Trade Commissioner Maros Sefcovic affirmed the 27-member bloc’s commitment to securing a mutually beneficial trade deal. However, he stressed that the “unmatched” EU-US trade relationship “must be guided by mutual respect, not threats” and emphasized that the EU “stand[s] ready to defend our interests.”
Trump’s Impatience and Shifting Stance
President Trump has openly expressed impatience with the pace of negotiations. Beyond his social media posts, he told reporters that his plan to raise tariffs on June 1st was “set,” stating, “I’m not looking for a deal – we’ve set the deal.” However, he immediately contradicted this by suggesting that a large investment in the US by a European company might make him open to a delay. He also clarified that the punitive tariffs would not apply to products built or manufactured within the United States.
Trump’s justification for the tariffs centers on what he perceives as an uneven trade relationship where the EU sells significantly more goods to the US ($600bn+ vs. $370bn bought last year), attributing this deficit to policies he claims are unfair to American companies. Specific concerns frequently raised include barriers related to cars and agricultural products. US officials, including Commerce Secretary Lutnick, have also cited the EU’s value-added tax system as a point of contention. The EU, however, has maintained that its standards on agriculture and food, such as regulations preventing the import of US meat treated with hormones, are “not up for negotiation.”
Interestingly, Trump also drew a comparison to trade relations with China, stating the EU has “haven’t treated our country properly” and have “banded together to take advantage of us,” adding that they are “in many ways, nastier than China.” This came despite China recently having their tariffs cut to 30% to facilitate negotiations, while the EU now faced a threat of 50%.
European Leaders Push for Negotiation
Across Europe, national leaders reacted with concern and called for negotiation over confrontation.
Ireland’s Taoiseach Micheál Martin warned against escalating tensions, saying, “We do not need to go down this road,” and stressing that negotiations are the “best and only sustainable way forward.”
France’s Trade Minister Laurent Saint-Martin indicated a continued policy of “de-escalation, but we are ready to respond.”
Germany’s Economy Minister Katherina Reiche urged the bloc to “do everything” to find a solution with the US.
Dutch Prime Minister Dick Schoof backed the EU’s negotiation strategy, noting that tariffs have fluctuated in past talks with the US.
While the EU negotiates as a unified bloc, some perspectives from the US side, like that of former Trump economic advisor Stephen Moore, have suggested the possibility of the US attempting to negotiate individually with European countries instead. Moore also speculated that Trump’s ultimate aim might be a broader strategy to “decouple not just the US but the whole world from Chinese influence.”
Existing Tariffs and EU Counter-Threats
The latest 50% threat comes against a backdrop of existing US tariffs on EU goods. Since mid-March, the US has maintained 25% tariffs on EU steel and aluminium imports, 25% on EU-made cars, and a 10% tariff on other EU imports. The 10% rate was part of an earlier announcement in April where a 20% tax was initially threatened, then reduced and paused until July 8th to allow for the current negotiation window.
The EU has consistently prepared for the possibility of trade talks failing and has outlined potential retaliatory measures. The bloc had previously threatened a 25% tariff on €18 billion ($20 billion) worth of US goods entering Europe, which has been put on hold. They are also currently consulting on additional measures against US imports valued at up to €95 billion (over $100 billion), underlining their readiness to defend their interests if negotiations break down. The European Commission recently lowered its economic forecast, based partly on the assumption that the 10% US tariff on European goods would remain in place long-term. The EU had previously offered a zero-tariff trade deal to the US, which was not accepted by Washington, and recent position papers from both sides in the current talks were described as “radically apart.”
Broader Economic Worries and Market Impact
Beyond the direct EU threat, President Trump also issued a separate warning targeting Apple, threatening a 25% import tax on iPhones not manufactured in the United States, a threat later broadened to any smartphone. This aligns with Trump’s “America First” trade philosophy aimed at boosting domestic manufacturing, though industry experts have widely dismissed the idea of major iPhone production shifting to the US as unrealistic. This threat follows Apple’s reported strategy of shifting some iPhone manufacturing away from China towards countries like India and Vietnam, a move Trump had previously expressed displeasure about to Apple CEO Tim Cook.
Trade experts view Trump’s aggressive rhetoric ahead of scheduled talks as an attempt to increase leverage, though they largely believe the EU is unlikely to yield to threats. They also noted that this re-escalation sets a negative precedent and runs counter to recent perceptions of Trump softening his stance on trade tensions.
The severity of a potential 50% tariff has prompted strong reactions from economists. Chicago Federal Reserve President Austan Goolsbee noted that even a 10% tariff rate would have been historically high, making 50% “a completely different order of magnitude” and warning it would be “really scary for the supply chain,” particularly impacting sectors like the auto industry in the Midwest. US Treasury Secretary Scott Bessent expressed hope that the threat might “light a fire under the E.U.,” suggesting most other countries were negotiating “in very good faith.”
The immediate reaction in financial markets was negative. Shares in both the US and Europe fell following the latest threats. The S&P 500 in the US was down about 0.7%, while major European indices like Germany’s Dax and France’s Cac 40 ended the day down over 1.5%, and the Stoxx 600 fell nearly 1%. Shares of major European companies with significant US operations, such as Deutsche Bank, BMW, Stellantis, SAP, L’Oreal, and LVMH, also saw declines. Apple shares likewise fell about 3% after the iPhone threat, despite having previously received some tariff relief.
References
- https://www.bbc.com/news/articles/cq857yqwvldo
- https://www.nbcnews.com/business/business-news/trump-eu-50-percent-tariff-talks-going-nowhere-rcna208712
- https://www.bbc.com/news/articles/cgr5xrygzk5o
- https://www.bbc.co.uk/news/articles/cq857yqwvldo
- https://www.euronews.com/business/2025/05/23/trump-suggests-50-tariff-on-eu-goods-starting-in-june
