Tensions are escalating between the European Union and the United States as the threat of increased American tariffs looms over early August. According to European diplomats, the EU is considering a significantly broader package of countermeasures, including potential action against major U.S. tech companies, if no deal is reached by the end of July. The current EU-U.S. negotiations revolve around avoiding sweeping tariff hikes, including a proposed 30% levy on European exports to the U.S., introduced by President Donald Trump.
“There will be no deal at any price,” warned German Finance Minister Lars Klingbeil (SPD). However, German Chancellor Friedrich Merz (CDU) is attempting to avoid a full-blown trade war, and supports the European Commission’s strategy of negotiating until the last moment. To maintain pressure, the EU has prepared two packages of countermeasures. The first targets American exports worth €21 billion and is on hold until August 6. A second, broader package valued at €72 billion is currently under review.
Some EU leaders are now advocating for tougher action, including restricting U.S. service companies’ access to investments and public contracts—a measure pushed strongly by France and referred to by some as the “nuclear option.” European Commission President Ursula von der Leyen acknowledged that such measures are extreme and should only be used in extraordinary circumstances, adding, “We are not there yet.”
Trade Commissioner Maroš Šefčovič delivered a sobering report to EU members after his recent trip to Washington, where he found limited room for maneuver on eliminating or reducing U.S. special tariffs. These include duties of up to 50% on steel and aluminum, and 25% on European-made vehicles. Meanwhile, U.S. Treasury Secretary Scott Bessent emphasized that the negotiations are about “quality over speed,” adding that “we will not rush just to make a deal.”
A new delay in the tariff deadline is still possible, but European industries warn that further postponement would result in major financial losses. The issue is expected to be discussed during French President Emmanuel Macron’s upcoming visit to Germany, where EU unity and pressure on Washington will be at the center of diplomatic talks.
