American tariffs on European goods threaten consumers on both sides of the Atlantic

The European Union hopes to find out on Monday if President Donald Trump will impose punishing tariffs to the largest commercial partner in the United States in a movement that economists have warned that they would have repercussions for companies and consumers on both sides of the Atlantic.

President Trump said on social networks this weekend that he would start sending Tariff increase letters to countries with which the United States does not reach satisfactory trade agreements that begin at noon on Monday. Japan and South Korea They were the first recipientswith letters from the Trump administration sent to Japanese Prime Minister, Shigeru Ishiba and the South Korean President Lee Jae-Myung on Monday, indicating that 25% of their respective countries will enter into force on August 1.

Trump imposed an import tax of 20% to all products made by the EU in early April as part of a set of tariffs aimed at countries with which the United States has a commercial imbalance. Hours after the specific duties of the Nation entered into force, they suspended them until July 9 at a standard rate of 10% to quiet financial markets and leaves time for negotiations.

However, expressing its discontent with the EU position in commercial conversations, Trump said it would increase the rate of rates for European exports to 50%, which could do everything, from French cheese and Italian leather items to German electronic products and Spanish pharmaceutical products, much more expensive in the United States.

The EU Executive Commission, which manages the commercial problems for the nations of 27 members of the block, said its leaders hope to reach an agreement with the Trump administration. Without one, the EU said she was prepared to retaliate with tariffs in hundreds of American products, ranging from beef and autopartes to beer and boeing aircraft.

The United States Secretary of the United States, Scott Besent, said the “State of the Union” program of CNN on Sunday that “the EU took to come to the table”, but that the conversations were now making “very good progress.”

Here are important things to know about trade between the United States and the European Union.

Commercial relationship “most important”

The European Commission describes trade between the United States and the EU as “the most important commercial relationship in the world.”

The value of the EU-E-EE goods and services. UU. Amounted to 1.7 billion euros ($ 2 billion) in 2024, or an average of 4,600 million euros per day, according to the EU Eurostat statistics agency.

The greatest US export to Europe was crude oil, followed by pharmaceutical products, aircraft, cars and medical and diagnostic equipment.

The largest exports from Europe to the United States were pharmaceutical products, cars, airplanes, chemicals, medical instruments and wine and liquors.

Trump has complained about the commercial surplus of 198 billion euros of the EU in goods, which shows Americans who buy more things from European companies than the other way around.

However, American companies fill some of the gaps by overcoming the EU when it comes to services such as cloud computing, legal and financial services and services.

The US Services surplus. Uu took the nation’s commercial deficit with the EU to 50 billion euros ($ 59 billion), which represents less than 3% of the general trade of the EU-EU.

Before Trump returned to office, the United States and the EU maintained a generally cooperative commercial relationship and low rates of rates on both sides. The US rate averaged 1.47% for European goods, while the EU averaged 1.35% for US products.

Less frequent posture towards long -standing ally

But the White House has taken a much less friendly position towards the former ally of the United States since February. Along with the rate of fluctuating rates in the European goods that Trump has floated, the EU has been the subject of the 50% rate of its administration on steel and aluminum, and a 25% tax on cars and imported parts.

Trump administration officials have raised a series of problems they wish to address, including agricultural barriers, such as EU health regulations that include chicken prohibitions with chlorine with chlorine and rescue meat treated.

Trump has also criticized the value added taxes of Europe, which EU countries prevent at the point of sale this year at rates from 17% to 27%. But many economists see VAT as neutral in commerce since they apply to national goods and services, as well as to imports. Because national governments establish taxes through legislation, the EU has said they are not on the table during commercial negotiations.

“On the thorny affairs of the regulations, the standards and the consumer’s taxes, the EU and its member states cannot give much ground,” said Holger Schmieding, chief economist of the Barenberg Bank of Germany. “They cannot change the way they execute the vast internal EU market according to US demands, which are often based on a defective understanding of how the EU works.”

American consumers would probably be injured

Economists and companies say that higher tariffs will mean higher prices for American consumers on imported goods. Importers must decide how much additional tax costs absorb through lower profits and how much to transmit to customers.

Mercedes-Benz dealers in the United States have said they are maintaining the line in the prices of the year 2025 “until new notice.” The German car manufacturer has a partial tariff shield because it makes 35% of Mercedes-Benz vehicles sold in the United States in Tuscaloosa, Alabama, but the company said it hopes that prices suffer “significant increases” in the coming years.

Simon Hunt, CEO of the Italian producer of wines and liquors Campari Group, told investment analysts that prices could increase for some products or stay the same depending on what rival companies do. If the competitors increase prices, the company could decide to keep its prices in Skyy vodka or Aperiti Aperiti to gain market share, Hunt said.

Trump has argued that it makes it difficult for foreign companies to sell in the United States is a way to stimulate a resurgence of American manufacturing. Many companies have ruled out the idea or said that it would take positive economic benefits years. However, some corporations have proven willing to change some United States in the United States.

The luxury group based in France LVMH, whose brands include Tiffany & Co., Luis Vuitton, Christian Dior and Moet & Chandon, could move some production to the United States, said billionaire CEO Bernaud Arnault at the annual company meeting in April.

Arnault, who attended the inauguration of Trump, has urged Europe to reach an agreement based on reciprocal concessions.

“If we end up with high tariffs, … we will be forced to increase our US production to avoid rates,” said Arnault. “And if Europe does not negotiate intelligently, that will be the consequence for many companies … It will be Brussels, if it’s about that.”

Some forecasts indicate that the US economy would be more at risk if negotiations fail.

Without an agreement, the EU would lose 0.3% of its Gross Domestic Product and the US GDP. It would fall 0.7%, if Trump slapped goods imported from Europe with tariffs from 10% to 25%, according to a investigation review by Bruegel, a group of experts in Brussels.

Given the complexity of some of the problems, the two parties can only reach a framework agreement before the deadline on Wednesday. That would probably leave a base rate of 10%, as well as car, steel and aluminum rates instead until the details of a formal commercial agreement are resolved.

The most likely result of commercial conversations is that “the United States will agree with the agreements in which it collects its worst threats of retaliation ‘tariffs’ far beyond 10%,” said Schmieding. “However, the way to get there could be Rocky.”

United States offering exemptions for some products could soften the way to an agreement. The EU could offer to relieve some regulations that the White House sees as commercial barriers.

“While Trump could sell a result as a ‘victory’ for him, the final victims of his protectionism would be, of course, mostly US consumers,” said Schmieding.

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