U.S. officials have informed the European Union that President Donald Trump may demand a 15% or higher baseline tariff on most European goods as part of a new trade agreement, according to The Wall Street Journal. This unexpected move has disrupted ongoing negotiations, with EU officials previously preparing to accept a 10% baseline.
Germany, once advocating for compromise, is now backing France’s firmer stance in response to Washington’s escalating demands. The EU is also urging the European Commission to prepare countermeasures, including retaliatory tariffs on U.S. imports, digital service restrictions, and limited access to public procurement contracts.
One of the more drastic responses under consideration is invoking the EU’s “anticoercion” instrument—a rarely used mechanism that allows for retaliatory actions against countries exerting economic pressure. This marks a sharp escalation in what is already one of the most significant transatlantic trade disputes in recent years.
Despite rising tensions, both Washington and Brussels still aim to finalize a deal before Trump’s self-imposed August 1 deadline. U.S. Commerce Secretary Howard Lutnick expressed optimism about reaching an agreement, but European diplomats warned that failure could lead to severe economic consequences for both sides, stating, “all options will hurt.”
With over $5 billion in goods and services exchanged daily between the U.S. and EU, the outcome of these talks could have a far-reaching impact on global trade. As the deadline nears, pressure is mounting on both parties to find common ground and avoid a damaging trade war that could ripple through global markets.