The EU will postpone its plan to hit the US with rates at € 21 billion of its annual export to Europe on Tuesday in the hope of reaching an agreement after Donald Trump announced that he would hit the block with 30 percent rates from 1 August.
President Ursula von der Leyen of the European Commission said on Sunday that the application of rates at € 21 billion from annual American exports to the EU, including chicken, motorcycles and clothing, which would come into effect on “early August” after midnight on July 14.
“We have always been clear that we prefer a negotiated solution with the US. This remains the case,” she said.
Donald Trump announced on Saturday that he would hit the EU and Mexico, two of the best trading partners in the US, with 30 percent rates from 1 August.
European leaders are divided on whether the block should insist on a fast framework trade that is comparable to the UK or continue to negotiate in the hope of achieving a better result.
Senior EU officials told the FT that they had not expected Trump to eventually continue with his new threat of 30 percent rates, which will be interpreted on a large scale by Brussels as an offer from the US president to increase the pressure on the block in the remaining time that was left for negotiations.
A EU official pointed to the chance of a very negative reaction from the American investors to such steep measures on an important trading partner.
“We rely on the markets,” said the civil servant.
German finance minister Lars Klingbeil called on the EU to continue “serious” conversations. “Nobody currently needs new threats or provocations. What we need is that the EU continues serious and targeted negotiations with the US,” he told Süddeutsche Zeitung.
However, Klingbeil warned that “if a fair negotiated solution cannot be reached, we have to take decisive countermeasures to protect jobs and companies in Europe.”
In addition to the first list of counter -ariffs, the European Commission, which runs trade policy, consults a package of rates with a further € 95 billion in imports from the US, including aircraft, alcohol and food, which would need the approval of the Member States. This has already been reduced to € 72 billion, according to two diplomats, after governments lobbying to remove some sensitive products from the goal list.
The US applies rates for around € 380 billion in annual imports from the EU.
Von der Leyen said that the committee would ‘continue to prepare’ the second list of countermeasures, but she said that the block would not evoke that the anti-Coercion instrument could be invoked, which could take measures against the export of the American service, for example by blocking companies for public purchasing.
The instrument “has been created for extraordinary situations – we are not there yet,” the president of the committee said, adding that “the time is for negotiations”.
Her comments came when after nine years of conversation she announced a “political agreement” about a free trade agreement with Indonesia.
The deal, which is expected to be completed in September, must be ratified by a weighted majority of the Member States and by the European Parliament. Officials are convinced that it will pass because Indonesia does not export sensitive agricultural products such as beef.
The bilateral trade in goods between the EU and Indonesia was € 27.3 billion in 2024, with EU exports worth € 9.7 billion and EU import worth € 17.5 billion.
“I am very happy that in this era of instability and confusion we give a good example,” said Indonesia President Prabowo Subianto.
Von der Leyen said that diversifying his trade agreements was a central part of the EU strategy to prevent Trump’s trade war.
However, some business groups and politicians have criticized Von der Leyen’s approach.
Italian Deputy Prime Minister Matteo Salvini, leader of the extreme right-wing league party who was enthusiastically rooted for the re-election of Trump, taken to Brussels for incorrect dealing of the negotiations.
“Trump has no reason to attack our country, but again we pay the price for a German -led Europe,” the League said in a statement.
Coldiretti, the influential Italian Agribusiness Association, has also criticized the handling of the negotiations by Brussels, warning that Trump’s endangered rate rate of 30 percent would be a “death blow” for export of Italy and an estimated € 2.3 billion in direct damage to Italian producers.
“If the rates were confirmed on 1 August, we could only notice the full failure of Von der Leyen’s policy,” said Ettore Prandini, president of Coldiretti.
Additional reporting by Amy Kazmin in Rome, Henry Foy in Brussels and Anne-Sylvaine Chassany in Berlin
