EU urges respect not threats as Trump pushes 50% tariff

The European Commission has urged the US to bring respect, not threats, to trade talks after President Donald Trump pushed for a 50% tariff on EU goods.

Insisting the European Union was committed to securing a deal that worked for both sides, EU trade chief Maroš Šefčovič spoke with the US Trade Representative Jamieson Greer and US Commerce Secretary Howard Lutnick.

Mr Trump had recommended higher tariffs on the EU from 1 June.

The European Commission, which oversees trade policy for the 27-nation bloc, remained ready to work in good faith, Mr Šefčovič said.

“EU-US trade is unmatched & must be guided by mutual respect, not threats. We stand ready to defend our interests,” he wrote in a post on X.

Major stock indices tumbled, the dollar fell against major currencies and the euro pared gains after Mr Trump’s announcement on EU tariffs and a potential 25% duty on Apple iPhones manufactured outside the US.

“With Trump, you never know, but this would be a major escalation,” said Holger Schmieding, chief economist at Berenberg.

“The EU would have to react and it is something that would really hurt the US and European economy.”

The tariff threat comes as talks are stuck, with the US demanding unilateral concessions from Brussels to open up to US business while the EU seeks an agreement in which both sides could gain, according to people familiar with the talks.

EU leaders and ministers that spoke after Mr Trump’s announcement broadly backed the European Commission’s approach.

The Taoiseach Micheál Martin said yesterday that it would be “very damaging” if US president acts on his threat.

Speaking in Cork, Mr Martin said that “everybody in the EU is acting in good faith and wants a negotiated settlement with the United States”, stressing the trading relationship between the EU and US “is the most dynamic in the world”.

Tánaiste Simon Harris said Ireland and the EU must continue to focus on finding a “negotiated settlement” on the issue.

In a statement, the Minister for Foreign Affairs and Trade said the Government has repeatedly said that “we need a substantive, calm, measured and comprehensive dialogue” with the US on tariffs.

Mr Harris said the reality is tariffs are “bad for Ireland, the EU and the US” as they will inevitably “push up prices for consumers and businesses”, and called for a sensible response to the situation.

“A negotiated solution remains very clearly the goal and the preferred outcome,” the Tánaiste said.

Polish deputy economy minister Michal Baranowski, whose country holds the rotating EU presidency, said the tariff threat appears to be a negotiating ploy.

“The European Union and the United States are negotiating,” he told reporters on the sidelines of a meeting in Brussels, adding negotiations could last until early July.

“The fact that we see some important statements in the public domain does not mean that they will translate into actions of the US administration,” he said.

Dutch Prime Minister Dick Schoof said the EU would stick to the path it had chosen.

“We have seen that tariffs can go up and down in talks with the US,” he told reporters in The Hague.

The EU already faces 25% US import tariffs on its steel, aluminium and cars and so-called “reciprocal” tariffs of 10% for almost all other goods, a levy that was due to rise to 20% after Mr Trump’s 90-day pause expires on July 8.

French Trade Minister Laurent Saint-Martin said Mr Trump’s new threats did nothing to help negotiations.

“We are maintaining the same line: de-escalation, but we are ready to respond,” he wrote on X.

Differing wishlist

In the past week, the US has sent Brussels a list of demands to reduce the US goods trade deficit, including so-called non-tariff barriers, such as by adopting US food safety standards and removing national digital services taxes, according to people familiar with the paper.

The EU response has been to offer a mutually beneficial deal that could include both sides moving to zero tariffs on industrial goods, the EU potentially buying more liquefied natural gas and soybeans and cooperation on issues such as steel overcapacity, which both sides blame on China.

The Šefčovič-US call was planned as a follow-up to these exchanges and ahead of a possible early June meeting in Paris.

Robert Sockin, senior global economist at Citigroup, said he believed Mr Trump was seeking to bring the EU to the table.

“With a 50% tariff, there would be a recessionary forecast for Europe, but I am doubtful it would be enacted,” he said.

The US says the tariffs are designed to redress the US deficit in goods trade with the European Union, which was almost €200 billion ($226.48 billion) last year, according to EU statistics agency Eurostat.

However, the United States does have a large trade surplus with the EU in services.