Transatlantic Trade War: EU Faces 30% US Tariff Threat Ahead of Summit with China

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EU to Retaliate with Countermeasures Against 30% Tariff; Experts See Strategic Pressure as Brussels Prepares to Engage Beijing

By TRH Global Affairs Desk

NEW DELHI, July 12, 2025 — US President Donald J. Trump has issued a stern warning to the European Union, threatening a 30% tariff on EU goods from August 1, unless Brussels agrees to end what he termed “persistent, large, and unfair trade deficits” created by EU tariffs and non-tariff barriers. Eu President Ursula von der Leyen responded, saying countermeasures to protect interests will be on the cards.

The warning came in a formal letter addressed to European Commission President Ursula von der Leyen. Leyen in a post on X said: “A 30% tariff on EU exports would hurt businesses, consumers and patients on both sides of the Atlantic. We will continue working towards an agreement by August 1. At the same time, we are ready to safeguard EU interests on the basis of proportionate countermeasures.”

The letter, laced with Trump’s characteristic transactional tone, accuses the EU of failing to offer reciprocal trade access, while benefiting disproportionately from the US market. “Our relationship has been, unfortunately, far from reciprocal,” Trump wrote.

He said that “we will charge the European Union a tariff of only 30% on EU products sent into the United States… Please understand that this is far less than what is needed to eliminate the Trade Deficit disparity.”

He warned that goods transshipped to the US to evade tariffs would face even higher duties and stated that tariffs could go higher if the EU retaliates. Experts said that transhipments mean Chinese goods routed to the US market through the EU.

However, Trump offered a pathway to ease tensions, suggesting there would be “no tariff” if EU companies chose to invest and manufacture within the United States. He added that his administration would ensure “quick and professional approvals.”

EU Braces for Escalation as China Summit Looms

The development comes at a delicate juncture for Brussels, as EU leaders prepare for the high-stakes EU-China Summit in Brussels next week, where trade alignment and strategic autonomy are on the agenda.

European analysts see Trump’s move as an attempt to pre-emptively pressure the EU from drifting closer to China on trade cooperation. According to Der Spiegel, the US tariffs could “destabilize EU unity on strategic policy toward both Washington and Beijing.”

Le Monde quoted a senior EU diplomat as saying: “Trump’s tariffs are not just about trade — they’re about keeping the EU in line geopolitically. It’s economic coercion with a strategic aim.”

Geopolitical expert Luuk van Middelaar told Politico Europe, “The EU is being squeezed between two giants — a transactional Washington and a rising China. Brussels now faces a defining moment on whether to deepen autonomy or cling to the Atlantic partnership.”

Market Concerns & Industry Fallout

European industry groups reacted swiftly. The German Automotive Association (VDA) called the 30% tariff “a devastating blow” to EU manufacturers and warned of massive job losses if the US follows through.

Trump’s threat, while not unprecedented, signals a possible re-emergence of a full-blown transatlantic trade war, reminiscent of the 2018 steel and aluminum tariffs. Analysts warn that the global economy, already reeling from disruptions in Asian supply chains and high interest rates, could face renewed uncertainty.

Brussels’ Next Move

In a brief response, a European Commission spokesperson said, “The EU remains committed to fair and open trade. Any unilateral move by the US will be met with a proportionate response in line with WTO rules.”

Behind closed doors, EU officials are reportedly weighing a dual strategy: preparing retaliatory tariffs while accelerating talks with both China and other partners, including India and ASEAN, to diversify trade routes.

What’s at Stake

Trump’s letter, while unusually formal and specific in tariff percentages, fits a broader strategy of economic nationalism that has defined his second term. As US elections draw nearer, playing hardball on trade may also serve domestic political goals.

The White House’s framing of the EU as a “major threat to our economy and national security” elevates the stakes well beyond commerce — potentially turning trade policy into a pillar of foreign policy brinkmanship.

Whether Brussels bows to Trump’s demands, counters with strength, or seeks middle ground through investment incentives, the next few weeks could redefine transatlantic economic ties — and determine how united the West remains amid rising global power shifts.

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