Trump threatens 50% tariff on EU goods; Europe warns of countermeasures worth 95 billion euros

The European Commission has warned the United States to approach trade negotiations with "mutual respect, not threats" after President Donald Trump proposed slapping a 50% tariff on European Union goods starting June 1.

EU trade chief Maros Sefcovic raised the issue in talks with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, reaffirming that the 27-nation bloc remains committed to reaching a “mutually beneficial” trade agreement. “EU-U.S. trade is unmatched & must be guided by mutual respect, not threats. We stand ready to defend our interests,” Sefcovic wrote on X.

Trump’s tariff remarks, paired with a potential 25% duty on Apple iPhones manufactured abroad, triggered immediate market jitters. Major indices slipped, the dollar weakened, and the euro pared gains. Economists warned of global economic fallout if the move materialised. “With Trump, you never know, but this would be a major escalation,” said Holger Schmieding, chief economist at Berenberg. “It would really hurt the U.S. and European economy.”

EU officials believe Washington is demanding unilateral concessions, including the adoption of U.S. food safety standards and the scrapping of national digital services taxes. Brussels, in contrast, is offering a package deal that includes zero tariffs on industrial goods, increased LNG and soybean purchases from the U.S., and cooperation on steel overcapacity.

French Trade Minister Laurent Saint-Martin dismissed Trump’s remarks as unhelpful, saying, “We are maintaining the same line: de-escalation, but we are ready to respond.” Italian Foreign Minister Antonio Tajani echoed the EU's position, emphasising the goal of “zero-for-zero tariffs.”

Despite rising tensions, talks are expected to continue through early July, with a potential meeting in Paris in June. “The fact that we see some important statements in the public domain does not mean that they will translate into actions of the U.S. administration,” Polish deputy economy minister Michal Baranowski said.

The EU has already faced U.S. tariffs of 25% on steel, aluminium, and cars, with a looming 20% hike after July 8. In response, Brussels has prepared countermeasures worth up to €95 billion but continues to press for a negotiated outcome.