U.S. doubles down on Aug. 1 tariffs deadline as EU battles for a deal

The U.S. has signaled it won’t let up on its Aug. 1 deadline for increased tariffs on the European Union because the bloc fights to strike a deal in time.

Over the weekend, U.S. Commerce Secretary Howard Lutnick mentioned he was assured a commerce deal could possibly be struck with the European Union, however warned that the deadline for a baseline 30% tariff is mounted.

“That is a tough deadline, so on August 1, the brand new tariff charges will are available,” Lutnick mentioned Sunday on CBS News when requested in regards to the deadline for his EU tariffs.

He did sign that talks may proceed after this date, nevertheless, noting: “These are the 2 greatest buying and selling companions on the planet, speaking to one another. We’ll get a deal completed. I’m assured we’ll get a deal completed.”

“Nothing stops international locations from speaking to us after August 1, however they are going to begin paying the tariffs on August 1,” he added.

The EU has indicated that it’s getting ready retaliatory measures in opposition to the U.S. if punitive commerce tariffs are imposed, however Lutnick dismissed this saying, “they’re simply not going to do this.”

Final-ditch talks to succeed in a commerce settlement are ongoing, with the EU hoping it could negotiate a decrease tariff charge. The bloc had hoped it may strike the same pact to the U.Ok., which was the primary nation to return to a commerce settlement with the U.S. That deal features a 10% baseline tariff with some caveats relating to car, steel and aerospace imports.

However economists and analysts have change into more and more skeptical about Brussels’ skill to succeed in the same framework.

For one, the EU has a much trickier relationship with U.S. President Donald Trump than the U.K. does. Trump has often bemoaned what he sees as an imbalanced commerce relationship and unfair buying and selling practices, which the EU denies.

In response to the European Council, whole commerce between the EU and U.S. amounted to 1.68 trillion euros ($1.96 trillion) in 2024. Whereas the EU ran a commerce surplus in terms of items, it recorded a deficit in providers. Total, the bloc had a surplus of round 50 billion euros final yr, when each items and providers are taken under consideration.

Final Friday, the Monetary Instances reported that Trump was pushing for a minimal tariff of 15% to twenty% on EU imports in any take care of the bloc. The president was additionally reportedly joyful to maintain duties on the auto sector at 25%, a transfer that might harm automobile exporters in Germany notably exhausting.

The White Home’s seemingly harsher stance towards Brussels has prompted policymakers to contemplate how they may reply to a 30% tariff, which might be a steep hike from the present 10% responsibility that got here into impact in April.

One EU official advised CNBC that there was a transparent shift in temper relating to the bloc’s potential response amongst all EU member states, besides Hungary, whose chief, Viktor Orban, is a Trump ally.

The bloc has been getting ready countermeasures in opposition to the U.S., with EU leaders repeatedly saying these could possibly be applied if no settlement with the U.S. is struck.

Lengthy-proposed levies on imports from the U.S. price 21 billion euros are at present on pause till Aug. 6, and the European Fee has ready a second spherical of tariffs concentrating on commerce price 72 billion euros.

Imports starting from clothes to agricultural merchandise and food and drinks objects could possibly be affected.

In the meantime, the Wall Avenue Journal and Bloomberg reported that an rising variety of members have signalled their assist for the EU deploying its anti-coercion instrument. That is the bloc’s strongest commerce device and would give the European Fee broad powers to take retaliatory motion in opposition to the U.S.

— CNBC’s Matthew Ward-Perkins contributed to this report.