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30 per cent US tariff on European goods threatens to shake up key trade relationship
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....0 per cent US tariff on European goods threatens to shake up key trade relationship<BR>Customs & Trade<BR>Dated:- 12-7-2025<BR>PTI<BR>Frankfurt (Germany), Jul 12 (AP) President Donald Trump announced 30 per cent tariffs on Saturday on the European Union, a move that will have repercussions for companies and consumers on both sides of the Atlantic. The tariffs could make everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the US. In April, had Trump proposed a 20 per cent tariff for EU goods as part of a set of tariffs targeting countries with which the US has a trade imbalance. He later threatened to raise that to 50 per cent after negotiations did not move as fast a....
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....s he would have liked. As of earlier this week, the EU's executive commission, which handles trade issues for the bloc's 27-member nations, said its leaders were still hoping to strike a deal with the Trump administration. Without one, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes. Here's what to know about trade between the US and the European Union: US-EU trade is enormous The European Commission describes the trade between the US and the EU as "the most important commercial relationship in the world”. The value of EU-US trade in goods and services amounted to 1.7 trillion euros (USD 2 trillion) in 2024, or an average of 4....
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.....6 billion euros a day, according to EU statistics agency Eurostat. The biggest US export to Europe was crude oil, followed by pharmaceuticals, aircraft, automobiles, and medical and diagnostic equipment. Europe's biggest exports to the US were pharmaceuticals, cars, aircraft, chemicals, medical instruments, and wine and spirits. EU sells more to the US than vice versa Trump has complained about the EU's 198 billion-euro trade surplus in goods, which shows Americans buy more from European businesses than the other way around. However, American companies fill some of the gap by outselling the EU when it comes to services such as cloud computing, travel bookings, and legal and financial services. The US services surplus took the natio....
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....n's trade deficit with the EU down to 50 billion euros (USD 59 billion), which represents less than 3 per cent of overall US-EU trade. What are the issues dividing the two sides? Before Trump returned to office, the US and the EU maintained a generally cooperative trade relationship and low tariff levels on both sides. The US rate averaged 1.47 per cent for European goods, while the EU's averaged 1.35 per cent for American products. But the White House has taken a much less friendly posture toward the longstanding US ally since February. Along with the fluctuating tariff rate on European goods Trump has floated, the EU has been subject to his administration's 50 per cent tariff on steel and aluminum, and a 25 per cent tax on imported a....
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....utomobiles and parts. Trump administration officials have raised a slew of issues they want to see addressed, including agricultural barriers such as EU health regulations that include bans on chlorine-washed chicken and hormone-treated beef. Trump has also criticized Europe's value-added taxes, which EU countries levy at the point of sale at rates of 17 per cent to 27 per cent. But many economists see VAT as trade-neutral since they apply to domestic goods and services as well as imported ones. Because national governments set the taxes through legislation, the EU has said they aren't on the table during trade negotiations. “On the thorny issues of regulations, consumer standards and taxes, the EU and its member states cannot give muc....
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....h ground,” said Holger Schmieding, chief economist at Germany's Berenberg bank. “They cannot change the way they run the EU's vast internal market according to US demands, which are often rooted in a faulty understanding of how the EU works.” 'Consequence for many companies' Economists and companies say higher tariffs will mean higher prices for US consumers on imported goods. Importers must decide how much of the extra tax costs to absorb through lower profits and how much to pass on to customers. Mercedes-Benz dealers in the US have said they are holding the line on 2025 model year prices “until further notice”. The German automaker has a partial tariff shield because it makes 35 per cent of the Mercedes-Benz vehicles....
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.... sold in the US in Tuscaloosa, Alabama, but the company said it expects prices to undergo “significant increases” in coming years. Simon Hunt, CEO of Italian wine and spirits producer Campari Group, told investment analysts that prices could increase for some products or stay the same depending what rival companies do. If competitors raise prices, the company might decide to hold its prices on Skyy vodka or Aperol aperitif to gain market share, Hunt said. Trump has argued that making it more difficult for foreign companies to sell in the US is a way to stimulate a revival of American manufacturing. Many companies have dismissed the idea or said it would take years to yield positive economic benefits. However, some corporations have pr....
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....oved willing to shift some production stateside. France-based luxury group LVMH, whose brands include Tiffany and Co., Luis Vuitton, Christian Dior and Moet and Chandon, could move some production to the United States, billionaire CEO Bernaud Arnault said at the company's annual meeting in April. Arnault, who attended Trump's inauguration, has urged Europe to reach a deal based on reciprocal concessions. “If we end up with high tariffs, ... we will be forced to increase our US-based production to avoid tariffs,” Arnault said. “And if Europe fails to negotiate intelligently, that will be the consequence for many companies. ... It will be the fault of Brussels, if it comes to that.” 'Road could be rocky' Some forecasts indica....
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....te the US economy would be more at risk if the negotiations fail. Without a deal, the EU would lose 0.3 per cent of its gross domestic product and US GDP would fall 0.7 per cent, if Trump slaps imported goods from Europe with tariffs of 10 per cent to 25 per cent, according to a research review by Bruegel, a think tank in Brussels. The most likely outcome of the trade talks is that “the US will agree to deals in which it takes back its worst threats of retaliatory' tariffs well beyond 10 per cent", Schmieding said. “However, the road to get there could be rocky.” The US offering exemptions for some goods might smooth the path to a deal. The EU could offer to ease some regulations that the White House views as trade barriers. “Wh....
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....ile Trump might be able to sell such an outcome as a win' for him, the ultimate victims of his protectionism would, of course, be mostly the US consumers,” Schmieding said. (AP) PY<BR> News - Press release - PIB....