EU Prepares Retaliation as Trump Threatens 30% Tariffs, Signals Openness to Talks

30% U.S. import tariffs on EU goods scheduled to begin August 1st. Meanwhile, Trump says he is open to trade talks with EU and other partners

Key Takeaways

• EU Trade Chief sees “potential to continue negotiations”

• Italy confirms €21B in retaliatory tariffs if talks fail

• South Korea seeks deal “in principle” before deadline

• European auto and alcohol stocks drop on tariff fears

The European Union on Monday issued a sharp warning to the United States over impending tariffs, signaling that it would impose countermeasures if ongoing negotiations with the White House fail to yield results before the August 1 deadline.

President Donald Trump confirmed over the weekend that a 30% tariff will apply to most imports from the EU and Mexico, escalating a trade dispute that has already disrupted diplomatic relations and rattled financial markets. However, speaking from the Oval Office, Trump stated he remained open to discussions.

"They would like to do a different kind of a deal and we're always open to talk, including to Europe," Trump said. "In fact, they're coming over. They’d like to talk."

Despite the diplomatic outreach, EU officials expressed frustration over Washington’s stance. EU Trade Commissioner Maros Sefcovic said there remains “potential to continue the negotiations” but emphasized that member states are prepared to act if talks fail.

“As I said before, it takes two hands to clap,” Sefcovic told reporters in Brussels. “The EU will respond with countermeasures if needed.”

Retaliation Measures in Focus as Member States Voice Frustration

The threat of retaliatory action gained momentum after EU foreign ministers concluded a tense meeting in Brussels. Danish Foreign Minister Lars Lokke Rasmussen described the U.S. tariffs as “absolutely unacceptable.”

Italy’s Foreign Minister Antonio Tajani confirmed that the bloc has prepared a €21 billion ($24.5 billion) list of tariffs on U.S. goods in the event no deal is reached. The EU has so far held off on enacting the list to avoid escalating the conflict, though consensus is building for a firmer response.

At the same time, Mexico’s President Claudia Sheinbaum voiced optimism that a security deal could still be finalized before the deadline. The White House later clarified that the proposed tariffs wouldn’t affect goods covered by the USMCA agreement.

Source: Reuters

European Industry and Markets React to Trade Uncertainty

The trade tension has hit European markets, especially in key export sectors. Germany’s Chancellor Friedrich Merz said the tariffs would “hit the German export industry to the core.” Volker Treier, head of the German Chamber of Commerce and Industry, warned that the tariff dispute “poses a serious threat” to transatlantic trade.

Producers of Italian wine, including Chianti exporters in Tuscany, have urged Brussels to develop new trade channels with South America, Asia, and Africa in response to anticipated U.S. restrictions.

Meanwhile, European equities dropped on Monday. The Hang Seng Index slipped 0.7%, and automobile and alcohol stocks across the eurozone recorded the heaviest losses. U.S. indices, however, remained mostly stable, as investors weighed Trump’s tariff threats against ongoing negotiations.

South Korea, Canada Race to Secure Deals Before Deadline

With the August 1 tariff implementation approaching, countries are rushing to secure bilateral trade pacts. South Korea’s Trade Minister Yeo Han-koo said it was possible to reach a deal “in principle” within the timeframe.

Yeo indicated that Seoul may offer greater agricultural market access in exchange for tariff relief, as Korea faces a potential 25% tariff, the same level set for Japan. The government is seeking a compromise to preserve industrial ties with Washington.

“Twenty days are not enough to come up with a perfect treaty,” Yeo told local reporters. “But an agreement in principle could provide breathing room for deeper negotiations.”