US Proposes 10 Percent Tariff on EU Goods Amid Tense Trade Negotiations Ahead of August Deadline
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US Proposes 10 Percent Tariff on EU Goods Amid Tense Trade Negotiations Ahead of August Deadline
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According to Politico and E&E News, the United States has formally offered the European Union a new baseline tariff of 10 percent on all EU goods. This deal includes exceptions for sensitive categories such as aircraft and spirits, signaling an attempt to carve out relief for certain export sectors while maintaining broad-based duties on incoming EU products. The Trump administration, after negotiations with EU trade chief Maroš Šefčovič and a call between President Donald Trump and European Commission President Ursula von der Leyen, decided to push back the deadline for the return of sweeping tariffs to August 1.
This means there is a window for further discussion, but countries that fail to cement new deals with Washington by August 1 will see tariffs revert to higher rates set back in April. In parallel, the Trump administration has started issuing formal letters to government leaders worldwide stating their new U.S. tariff rates. Notably, South Korea and Japan will both face a 25 percent tariff from August 1 if no further action is taken.
CBS News reports that the Trump administration already imposed a 20 percent import tax on all EU-made goods in early April. That rate was soon scaled back to the current 10 percent to calm financial markets and facilitate negotiations, but President Trump has repeatedly warned that the rate could surge to as much as 50 percent for European exports if he remains displeased with ongoing trade talks. Products at risk of increased tariffs include French cheese, Italian leather, German electronics, and Spanish pharmaceuticals. Economists warn these changes could drive up prices for American consumers, as importers may be forced to pass the additional costs down the supply chain. Mercedes-Benz dealers in the United States, for example, expect significant price hikes for new model years.
Meanwhile, the EU is preparing its own countermeasures. The Trade Compliance Resource Hub notes that Brussels launched a public consultation in May to consider target products for new retaliatory tariffs if negotiations fail. The EU is eyeing U.S.-origin aircraft, automobiles, medical devices, IT equipment, and industrial machinery, among others, potentially affecting 95 billion euros in U.S. imports.
The transatlantic tariff standoff is also complicated by U.S. criticism of Europe's value-added taxes, which range from 17 to 27 percent, though EU officials have made clear these are not up for debate. As talks intensify ahead of the August 1 deadline, both sides are bracing for market volatility and higher stakes in the global trade order.
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