Donald Trump threatens the EU with tariffs, the EU prefers negotiations, but is ready for a trade war | Credit: Tomas Ragina/Shutterstock
Donald Trump has lit the fuse on what could be a new transatlantic trade war—this time with a 17% tariff bomb aimed squarely at Europe’s cherished food and farm exports. The threat landed hard in Brussels after EU Trade Commissioner Maroš Šefčovič received the warning in person during talks in Washington this week.
Among those at the table: Trump’s economic lieutenants, Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, and Commerce Secretary Howard Lutnick. According to multiple sources, Trump intends to send formal letters to a dozen countries warning of permanent tariffs reaching up to 70% unless they reach a deal by his self-imposed July 9 deadline.
“They’ll range in value from maybe 60, or 70 per cent to 10 and 20 per cent, but they [the letters] are going to be starting to go out sometime tomorrow,” he told reporters, according to the Guardian.
Favour a negotiated solution
For the EU, this means Belgian chocolate, French cheese, Irish butter, Spanish olive oil and Italian prosciutto could all face a tariff wall at U.S. borders—slashing competitiveness and potentially gutting billions from the European agro-export sector.
EU trade spokesperson Olof Gill said on Friday evening that the EU’s priority continued to “favour a negotiated solution”.Gill also said, “progress was made towards an agreement in principle during the latest round of negotiations which took place this week” and negotiations would continue “on substance over the weekend”.
However, the EU also made clear it is prepared for a potential trade war with retaliatory tariffs on everything from Bourbon to Boeing 747s if Trump walks away before Wednesday, the Guardian noted.
Time is running out
On Thursday, European Commission President Ursula von der Leyen confirmed that the EU was seeking a high-level framework deal, stating that it would be too difficult to achieve a comprehensive agreement within the available time.
The EU is also seeking immediate relief from tariffs in key sectors as part of the framework, including the auto industry, which has to deal with a 27.5 per cent tariff, up from 2.5 per cent before Trump started his trade aggression.
“What we are aiming at is an agreement in principle,” Von der Leyen said in Denmark. “That is also what the UK did.”
The 90-day pause on Trump’s “liberation tariffs” ends on Wednesday for more than 60 countries in addition to the EU, which was more recently threatened with a 50 per cent tariff.
EU is ready for a trade war
If the U.S. goes through with its threat, the EU won’t blink. “All instruments are on the table,” the EC president said, echoing a growing mood in Europe that this time, the bloc will not fold under pressure.
What’s holding up a deal isn’t just dollars and cents—it’s ideology. The U.S. and EU are no longer speaking the same trade language.
Trump’s administration sees negotiations as a zero-sum game—concessions demanded, not exchanged. Brussels, in contrast, remains rooted in the principle of reciprocity: you give, we give. That mismatch has made progress glacial. Even a limited framework deal—a political statement with no binding details—is proving elusive with just hours left on the clock.
Big Tech, big problems
One of the key fractures lies in digital regulation. Europe has become the global benchmark for reining in Big Tech, from data privacy to algorithm transparency. The U.S. sees those rules—particularly when applied to Silicon Valley giants—as targeted trade restrictions.
“Trump’s team wants the EU to gut its digital rules as the price for a deal,” said Alberto Rizzi of the European Council on Foreign Relations. “But that would fly in the face of Europe’s legal architecture and democratic commitments.”
The message from Brussels is clear: regulating digital platforms is not up for negotiation.
Taxation: A red line
Another point of contention is VAT. Trump has long framed Europe’s value-added tax system as a hidden tariff on American goods, even though VAT is levied equally on domestic and foreign products. Still, Trump insists it puts U.S. companies at a disadvantage.
European officials see this as yet another distortion—and one that undermines any rational negotiation. “Taxation is a national matter. Full stop,” said one senior EU diplomat. “It’s not even on the table.”
When worldviews collide
More broadly, the talks are hindered by a total lack of trust. Trump’s view is transactional: Allies must pay their dues or face the consequences. Europe, meanwhile, insists on multilateralism and rules-based trade. The two sides are essentially negotiating in different universes.
“This administration sees talks through a lens of leverage,” said Philip Luck of the Centre for Strategic and International Studies. “They don’t believe in mutual benefit—they want capitulation.”
Trump’s pushback against the EU’s offer of zero-for-zero tariffs—essentially a truce in exchange for free trade—has only deepened the divide.
Ticking clock, rising stakes
While both sides claim they want to avoid escalation, few believe a meaningful deal is within reach. “I’m very sceptical,” said Jacob Kirkegaard of the Peterson Institute. “The EU will retaliate. And then we’ll enter a spiral—retaliation after retaliation—until the economic pain forces someone to blink.”
Von der Leyen and Šefčovič insist they’re still working toward a “good and ambitious transatlantic trade deal.” But off-record, EU officials admit they’re bracing for the worst.
One diplomat summed it up bluntly: “Trump wants to play hardball? Fine. But Europe isn’t bringing a baguette to a gunfight.”
