The EU said it was ready to strike a deal with the US to avoid severe tariffs, after President Donald Trump sowed doubt over reaching a deal.
“We remain on our side fully locked and loaded to conclude an agreement with the US,” EU trade spokesman Olof Gill told reporters.
“Let’s see what happens when our friends in Washington wake up in a few hours.”
It appeared this week that Brussels and Washington would seal a quick deal that would prevent the return of 20% levies – or even higher.
However, there was no breakthrough despite the EU’s hopes.
Instead, Mr Trump extended the deadline for tariffs to kick in again for several trading partners until 1 August, from 9 July.
He then threw a spanner in the works yesterday when he told NBC that the EU would receive a letter with details of new tariffs “today or tomorrow”.
The EU was “prepared for all scenarios”, Mr Gill told reporters.
“We remain in close contact with our member states and our industry to ensure that whatever plan we go with – Plan A, B, C, D or E – is the right one for the EU,” he added.
The EU prepared retaliatory duties on US goods worth around €21 billion after Trump also slapped 25% tariffs on steel and aluminium imports earlier this year, but they are suspended until 14 July.
The EU has not made any move to extend the suspension but could do it quickly if needed.
“If a political decision is made to extend the suspension, then we extend the suspension. There’s no difficulty doing that,” Mr Gill said.
Trump eyes 35% tariff on Canada, up to 20% for others
Donald Trump has said that the US will place higher tariffs on Canada, imposing a 35% tariff on imports next month and that he planned to impose blanket tariffs of 15% or 20% on most other trading partners.
In a letter released on his social media platform, Mr Trump told Canadian Prime Minister Mark Carney the new rate would go into effect on 1 August and would go up if Canada retaliated.
In a post on X yesterday, Mr Carney said his government will continue to defend Canadian workers and businesses in their negotiations with the US as they work towards that deadline.
The 35% tariff is an increase from the current 25% rate that Mr Trump had assigned to Canada and is a blow to Mr Carney, who was seeking to agree a trade pact with Washington.
Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1.
Canada has made vital progress to stop the scourge…
— Mark Carney (@MarkJCarney) July 11, 2025
An exclusion for goods covered by the United States-Mexico-Canada Agreement (USMCA) on trade was expected to stay in place, and 10% tariffs on energy and fertiliser were also not set to change, though Mr Trump had not made a final decision on those issues, an administration official said.
Mr Trump complained in his letter about what he referred to as the flow of fentanyl from Canada as well as the country’s tariff- and non-tariff trade barriers that hurt US dairy farmers and others.
He said the trade deficit was a threat to the US economy and national security.
“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Mr Trump wrote.
Canadian officials say a miniscule amount of fentanyl originates from Canada but they have taken measures to strengthen the border.
“Canada has made vital progress to stop the scourge of fentanyl in North America. We are committed to continuing to work with the United States to save lives and protect communities in both our countries,” Mr Carney added in his X, formerly Twitter, post late on Tuesday.
The prime minister said last month that he and Mr Trump had agreed to wrap up a new economic and security deal within 30 days.
Broadened trade war
Mr Trump has broadened his trade war in recent days, setting new tariffs on a number of countries, including allies Japan and South Korea, along with a 50% tariff on copper.
His latest salvo rattled investors anew, with US and European stock futures dipping in Asia as markets nervously awaited word on what tariff Trump would assign the European Union later today.
The potential escalation between the EU and the US is a big deal for financial markets,” said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia.
“If you get something similar to (the US-China trade war in April), that’s going to be very destabilising.”
In an interview with NBC News published yesterday, Mr Trump said other trading partners that had not yet received such letters would likely face blanket tariffs.
“Not everybody has to get a letter. You know that. We’re just setting our tariffs,” Mr Trump said in the interview.
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” Mr Trump was quoted as saying by the network.
Myanmar’s ruling military general has asked Mr Trump to reduce the 40% tariff rate on his country’s exports to the US to 10-20% and is ready to send a negotiation team to Washington if needed, state media reported.
The president of the Philippines will meet Mr Trump in Washington this month for the first time and will discuss its 20% tariff, the country’s foreign minister said.
Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports. It bought $349.4 billion of US goods last year and exported $412.7bn to the US, according to US Census Bureau data.
Mr Carney, who led his Liberal Party to a comeback election victory earlier this year with a pledge to tackle trade challenges with the US, had been aiming to negotiate a trade deal with its key trading partner by 21 July.
Mr Trump, in his letter, did not specifically address how trade negotiations were proceeding, but he said the “tariffs may be modified, upward or downward, depending on our relationship with your Country”.
Last month, the Carney government scrapped a planned digital services tax targeting US technology firms after Mr Trump abruptly called off trade talks saying the tax was a “blatant attack”.
