The United States is expected to maintain a 10% baseline tariff, while the European Union is preparing to take escalatory countermeasures to strive for a more favorable agreement.
If President Trump imposes a 10% baseline tariff on EU commodities as many expect, the EU plans to impose retaliatory tariffs on US imports, including Boeing aircraft.
EU officials expect that even after trade negotiations conclude, the US will retain some tariffs. The previously responsible EU Commissioners for trade did not clarify whether this would trigger retaliation.
Stephane Sejourne, the EU's Director for Industrial Affairs, told Bloomberg: "If the US insists on an asymmetric agreement, including retaining a 10% tariff as a result of the negotiations, we need to retaliate and rebalance in key areas."
The EU is rushing to reach an agreement before US export tariffs rise to 50% on July 9. Trump has previously criticized the EU, saying it was "established to undermine the US," and has attacked trade surpluses and so-called trade barriers.
According to EU estimates, US tariffs currently cover 380 billion euros ($439 billion), which is about 70% of EU exports to the US.
According to anonymous EU officials, negotiations have accelerated, and the committee is fully seeking a win-win solution. Bloomberg previously reported that last week, the EU informed member states that the demands insisted by the United States would lead to an unfair agreement, including potential violations of WTO rules regarding fish export quotas, non-reciprocal tariff measures, and what EU officials referred to as "unrealistic" economic security requests.
Most EU officials expect that even if an agreement is reached, the U.S. will retain most tariffs, including a 10% baseline tariff. The agreement signed between the United Kingdom and the U.S. this month maintains a 10% tariff on nearly all UK exports.
EU trade chief Maros Sefcovic stated in Berlin on Monday: "We know that the U.S. is very eager for a 10% baseline tariff, while also developing rebalancing measures to prevent negotiations from reaching an unfair result and to protect European businesses and workers."
Sejourné emphasized that Airbus SE in Toulouse, France, cannot withstand the "unfair competition" from Boeing (headquartered in Arlington, Virginia), as European aircraft manufacturers face an additional 10% tariff. "If rebalancing does not occur, some CSI Leading Industry Index will lose protection, so action must be taken."
Bloomberg previously reported that even if negotiations go smoothly, the EU's best expectation is still to reach a principled agreement that allows negotiations to extend beyond July 9, thus prolonging the current truce.
The EU has approved taxes on 21 billion euros of U.S. commodities (in response to Trump's tariffs on aluminum and steel products), targeting politically sensitive areas including Soybean from Louisiana (the hometown of U.S. House Speaker Mike Johnson), agricultural products, poultry, and motorcycles, and is also preparing to impose taxes on 95 billion euros of U.S. goods (in response to reciprocal tariffs and car duties), with the list potentially subject to adjustments based on member states and industry appeals.
Trump stated to reporters on his return from the G7 summit in Canada this month that he believes the EU has not yet offered a "fair agreement": "They have to either reach a good deal or pay the way we say."
The U.S. has already imposed tariffs on European cars, steel, and aluminum. Trump also announced that the U.S. is working to expand tariffs to other industries, including pharmaceuticals, semiconductors, and commercial airplanes.
