US-EU Trade War Escalates: Trump's 10% Tariffs Threaten Economic Stability and Potential 50% Import Hikes Podcast By cover art

US-EU Trade War Escalates: Trump's 10% Tariffs Threaten Economic Stability and Potential 50% Import Hikes

US-EU Trade War Escalates: Trump's 10% Tariffs Threaten Economic Stability and Potential 50% Import Hikes

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 Listeners, welcome to the latest edition of the European Union Tariff News and Tracker. Tensions between the United States and the European Union over tariffs continue to make headlines as President Donald Trump pushes forward with major changes to American trade policy. This week, European officials are grappling with the reality of a new 10% baseline tariff on goods exported to the US, a figure that’s become the central sticking point in ongoing trade negotiations, according to Reuters. Despite repeated efforts to negotiate a lower rate, US Commerce Secretary Howard Lutnick and the Trump administration have made it clear that they will not accept anything less than a 10% reciprocal tariff on most EU goods.

The situation has become especially urgent as the European Union works to secure a trade deal before July 9, when these reciprocal tariffs could automatically rise even higher—potentially up to 50% on a broad range of goods, as reported in recent talks and industry trackers. These potential hikes come on the heels of President Trump’s April announcement of his Reciprocal Tariff Policy, which called for country-specific tariffs of up to 20% on most imports from the EU. The US move followed findings from the Office of the US Trade Representative that current trade arrangements were “harmful” and not reciprocal, sparking the possibility of a tit-for-tat escalation.

Bruegel, a leading European think tank, analyzed the numbers and found that before these trade tensions, the average US tariff rate on imports from the EU was only around 1.5%. Now, with Trump’s tariffs in full effect, the average could surge to over 15%, with the greatest increases hitting sectors like steel, aluminum, and vehicles.

Economic forecasts from the European Commission warn of significant yet manageable consequences for the EU economy if these tariffs persist or escalate. Model simulations suggest that while the US economy would take the brunt of negative effects, the EU would also see moderate economic headwinds, especially if both sides continue to retaliate and investor confidence remains shaken.

On the ground, the US Customs and Border Protection’s 2025 tariff rate quota tables have already adjusted limits for European steel and aluminum as these new tariffs take shape. Meanwhile, both sides are preparing countermeasures, but EU officials, including Commission President Von der Leyen, emphasize their openness to negotiation and the removal of remaining trade barriers—if the United States is willing to come to the table.

That wraps up today’s update on the US-EU tariff saga. Thank you for tuning in, and remember to subscribe for the most up-to-date news and analysis. This has been a quiet please production, for more check out quiet please dot ai.

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