EU prolongs the halt on retaliatory tariffs on American goods until August. - Prolongation of Counter-Duty Exemption for American Goods until August
The transatlantic trade relationship between the European Union (EU) and the United States is teetering on the brink of an intensified trade conflict, as both parties prepare for potential counter-tariffs. The US President's threat to impose higher tariffs on EU products is a response to the EU's ongoing countermeasures, which were initially imposed due to trade disputes, particularly over US tariffs on steel and aluminum.
The list of US products affected by the counter-tariffs includes jeans and motorcycles, with the EU considering additional import duties on a wide range of US products, including aircraft, automobiles, medical devices, IT equipment, and industrial machinery, covering approximately €95 billion in US-originating imports. On the export side, restrictions on scrap metals and chemicals totaling about €4.5 billion in EU exports are being considered.
The EU had prepared counter-tariffs on US products worth around €21 billion, but a second, significantly larger list is currently being worked on. This list, worth up to €95 billion, includes a total value that is more than four times the initial list. The extension of the suspension of counter-tariffs is a temporary measure, and negotiations with Washington are not preventing the EU from preparing this second list.
The EU's readiness to implement necessary protective measures and continue intense negotiations to prevent the escalation has been emphasized by European Commission President Ursula von der Leyen. French President Emmanuel Macron supports the European Commission’s stance and hopes for a mutually acceptable agreement before the August 1 deadline, but also stresses the importance of preparing credible countermeasures if those talks break down.
The implications for future trade conflict between the EU and the USA are significant. The introduction of a 30% US tariff on EU goods could provoke an EU response with counter-tariffs, leading to a cycle of retaliation that would heighten trade tensions. European exporters could suffer heavily from increased US tariffs, while US consumers and companies also face negative effects from reduced access and possible countermeasures.
The hardened stances and invocation of instruments like the Anti-Coercion Instrument (ACI) indicate a tougher diplomatic environment, potentially reducing space for cooperation on trade and other issues. Both sides are under pressure to reach a deal by August 1, but if that fails, the likelihood of entrenched trade conflict rises, affecting sectors such as automotive, aerospace, and industrial machinery heavily.
The forthcoming weeks are crucial for determining whether a negotiated resolution can be found or if both sides will enter a more adversarial trade phase. The EU's extension of the suspension of counter-tariffs until early August is a temporary reprieve, but the looming threat of higher US tariffs and the EU's preparedness for countermeasures suggest a continued tension in the trade relationship between the EU and the US.
References: [1] European Commission. (2025). Public consultation on potential countermeasures in response to US tariffs. Retrieved from https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12973-Public-consultation-on-potential-countermeasures-in-response-to-US-tariffs [2] European Commission. (2025). EU ready to take all necessary actions in response to US tariffs. Retrieved from https://ec.europa.eu/commission/presscorner/detail/en/IP_25_XXX [3] European Commission. (2025). Trump's tariff threat: EU prepares countermeasures. Retrieved from https://ec.europa.eu/commission/commissioners/2019-2024/trudeau/announcements/trumps-tariff-threat-eu-prepares-countermeasures_en
- The European Union (EU) is exploring various cooperative approaches to address the intensifying trade conflict with the United States, as evidenced in the EU's drafting of a significant second list of counter-tariffs worth up to €95 billion, in light of ongoing disputes over trade policies and legislation, such as the US President's proposed tariffs on EU products.
- In the realm of general news, the collaboration between the EU and the US has faced unprecedented strains due to the escalating trade conflict, prompting the EU to consider far-reaching countermeasures against US products, spanning industries like automotive, aerospace, and IT equipment, in an effort to uphold the community and cooperation policies that underpin their interdependent economies.
