Unlock the White Home Watch publication at no cost

Your information to what Trump’s second time period means for Washington, enterprise and the world

Donald Trump has warned of plans to impose a 50 per cent tariff on imports from the EU from subsequent month, including that talks with the bloc are “going nowhere” as he will increase his menace to upend international commerce.

The transfer escalates the commerce conflict with the EU barely two weeks after the US agreed with China to slash tariffs in a pact that comforted international buyers.

It additionally highlights the animosity that the Trump administration has proven in direction of Brussels because the US president’s return to the White Home in January.

In a submit on his Fact Social platform on Friday, Trump attacked the bloc for “Trade Barriers, VAT Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, [and] unfair and unjustified lawsuits against Americans Companies”.

He added: “Our discussions with them are going nowhere! Therefore I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.”

Such a stage can be greater than double the tariff charge the US president introduced for the EU on his self-styled “liberation day” on April 2.

Inventory markets sank following Trump’s submit, with S&P 500 futures down 1.6 per cent forward of the New York market open. The Stoxx Europe 600 index fell 2.1 per cent.

Fairness markets had recovered from April’s rout, helped by strikes corresponding to Trump’s climbdown on China, however have been rocked by his newest commerce salvo.

The president’s transfer “puts a dent in the view that markets will rein in Trump”, mentioned Andrew Pease, chief funding strategist at Russell Investments.

US commerce consultant Jamieson Greer is because of discuss to EU commerce commissioner Maroš Šefčovič afterward Friday.

The US imposed a 20 per cent “reciprocal” charge on most EU items in April, however halved it till July 8 to permit time for talks. It has retained 25 per cent ranges on metal, aluminium and automobile elements and is promising comparable motion on prescription drugs, semiconductors and different items.

The bloc should now select whether or not to retaliate with counter-tariffs or accede to US calls for to make concessions.

Member states have authorized a €21bn package deal of as much as 50 per cent tariffs on gadgets corresponding to maize, wheat, bikes and clothes — measures that at current usually are not because of take impact till July 14 however may very well be shortly deployed.

The European Fee continues to be consulting on a greater €95bn listing of attainable measures, which incorporates Boeing plane, automobiles and bourbon whiskey.

As European markets have been by hit by Trump’s newest menace, exporters and shares linked to the well being of the economic system corresponding to banks have been notably affected.

Carmaker Stellantis dropped 5 per cent whereas Deutsche Financial institution shed greater than 6 per cent.

Merchants moved to cost in sooner rate of interest cuts from the European Central Financial institution to help a tariff-hit economic system.

The possibility of a 3rd quarter-point charge minimize by the tip of this yr rose to greater than 40 per cent in contrast with roughly 15 per cent earlier on Friday, in accordance with ranges implied by swaps markets.

“This is a reminder that the trade uncertainty is in no way over,” mentioned Kasper Elmgreen, chief funding officer for mounted earnings and equities at Nordea Asset Administration. “Every day that we don’t have a deal, we risk serious economic damage.”

US officers have been pissed off by the EU’s failure to supply the sort of concessions different international locations have, with Howard Lutnick, US commerce secretary, saying on Thursday that Brussels was “impossible” to barter with.

Washington desires Brussels to cut back import limitations to decrease the scale of the US’s commerce deficit in items with the bloc, which totalled $192bn in 2024.

The Trump administration considers EU meals and product requirements protectionist and desires the bloc to unilaterally drop tariffs. The EU has proposed that each side scrap tariffs on all industrial and a few agricultural merchandise.

Brussels has additionally supplied to assist deal with Chinese language overcapacity in sectors corresponding to metal and automobiles, and to debate restrictions on exporting expertise to Beijing.

Nevertheless it has refused to debate scrapping nationwide digital taxes or VAT, key US calls for, or weakening EU regulation of US tech corporations.

The European Fee mentioned it will not remark forward of the decision between Greer and Šefčovič. 

Trump’s submit on Friday contrasted together with his administration’s strikes to defuse commerce tensions with Beijing this month. The US has additionally lately sealed a commerce cope with the UK.

However negotiations with different international locations have since proceeded slowly, and Trump officers have signalled lately that they might be taking a harder strategy once more, warning that international locations that weren’t negotiating in “good faith” would once more face most tariffs.

Further reporting by Emily Herbert