Trump's EU tariff hammer: The most important questions and answers

Washington/Brussels. US President Donald Trump is taking a fully confrontational approach in the tariff dispute with the EU. Despite ongoing talks on a mutually acceptable solution, he announced in a letter published on Saturday that he would impose new, high tariffs effective August 1 and warned the EU against taking countermeasures. Is this all just a negotiating tactic? An overview of the questions and answers.

The letter to EU Commission President Ursula von der Leyen begins very pleasantly. The first sentence reads: "It is a great honor for me to send you this letter, as it underlines the strength and commitment of our trade relationship (...)." Shortly thereafter, however, things get tough for the EU:

Trump announced that the US would impose a base tariff of 30 percent on imports from the EU starting August 1 – separate from the sectoral tariffs already in place on imports of cars and car parts, as well as steel and aluminum products. He also announced that he expects US companies to be able to import goods into the EU duty-free in the future. He also threatened: If the EU imposes retaliatory tariffs, their tariff rate would be increased to the announced 30 percent, he warned.

This would be a particularly severe blow to the export-oriented German economy, as tariffs generally make products more expensive and thus slow down trade. The economy was already suffering from the tariffs already introduced by Trump. These included a base tariff of 10 percent, tariffs on imported cars and car parts of 25 percent, and tariffs on steel and aluminum products of 50 percent.

The president of the automotive industry association VDA, Hildegard Müller, commented on Saturday: "The costs for our companies are already in the billions - and the sum is growing with each passing day."

In the letter, Trump describes the tariffs as a necessary corrective measure. In his view, European tariffs and other trade barriers have caused a large and unsustainable US trade deficit for years. This deficit poses a significant threat to the US economy and national security.

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That is completely unclear. Optimists in Brussels hope that Trump is merely using the letter to create a threatening atmosphere so that he can ultimately achieve more by continuing the negotiations. It is also considered possible that he wants to delay a deal as long as possible in order to cash in on tariffs already imposed. The EU therefore assumes that Trump needs tariff revenue to fulfill his promises of tax cuts. US Treasury Secretary Scott Bessent recently calculated that he aims to raise more than 300 billion US dollars in import tariffs by the end of the year. In addition to the EU, almost all of the US's other trading partners worldwide are affected.

Yes. If the EU is willing to open its previously closed trade markets to the United States and eliminate trade barriers, Trump writes, they might consider adjusting the letter. The tariffs could be adjusted upwards or downwards depending on how relations develop.

What was actually on the table was a draft joint declaration. Most EU member states were fundamentally willing to accept a new US base tariff rate. However, this should be at or below 10 percent, not 30 percent. They were also willing to pledge to work on reducing the trade deficit—for example, through increased imports of liquefied natural gas (LNG) from the US. However, the EU had also made it clear that it would not change the digital economy rules criticized by Trump.

The EU Commission, which is responsible for tariff negotiations with the US, immediately made it clear that it intends to continue striving for a consensual solution to the trade conflict for as long as possible. Commission President von der Leyen stated that the Commission has taken note of US President Donald Trump's letter regarding a new tariff rate and a new timetable. The Commission remains ready to work toward an agreement by August 1.

Theoretically, the US could be put under pressure immediately with initial retaliatory tariffs. These have even already been decided upon, but have been suspended due to ongoing negotiations. It is likely that they will only come into effect when there is no longer any chance of a negotiated solution – or when the US implements its new tariff plans. Economically, EU tariffs could significantly harm the US – the EU, with approximately 450 million citizens in 27 countries, is a real market power.

The background to this is, in particular, the dependence on defense issues. There are concerns that Trump could create new threats in the event of an escalating trade conflict – for example, by once again questioning the obligation to provide military assistance within NATO or by reducing support for Ukraine – both of which are extremely sensitive issues given the threats posed by Russia.

According to the EU, the European Union and the United States have the world's most extensive bilateral trade and investment relationship and the most closely integrated economies. Together, they account for nearly 30 percent of global trade in goods and services and 43 percent of global economic output. According to EU figures, transatlantic trade in goods and services amounted to approximately €1.7 trillion in 2024. The EU and the US were each other's most important trading partners for goods.

According to the latest figures from the statistics office Eurostat, the EU recorded a significant surplus of around €198 billion in goods trade with the US in 2024. In 2024, goods worth around €533 billion were exported to the United States, while only around €335 billion were imported from the US. In services, however, the EU has a trade deficit with the US, so that, according to its own figures, the EU will only have a trade surplus of €50 billion in goods and services in 2024. "This corresponded to less than three percent of total trade between the EU and the US," it is argued in Brussels.

RND/dpa