U.S. President Donald Trump has issued a stark warning to the European Union, proposing a hefty 50 percent tariff on goods starting June 1, 2025. In a statement posted on social media, Trump expressed frustration over trade negotiations, declaring, “The European Union, which was formed with the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with.”
This ultimatum significantly accelerates the timeline for resolving issues affecting the €1.6 trillion transatlantic trade relationship. Just a month prior, Trump had introduced a 20 percent “reciprocal” tariff on most EU goods, later reducing it to 10 percent. The current warning leaves a mere 90 days for negotiators to reach an agreement before the steep tariff comes into effect.
Market Reaction and Trade Discussions
The announcement triggered immediate declines in European stock markets, with Germany’s DAX index dropping by 2.2 percent and France’s CAC 40 plunging 2.7 percent. Additionally, gold prices rose by 2.1 percent as investors sought safety amid the uncertainty, while the price of Brent crude oil fell by 1.1 percent, reflecting concerns over future economic activity.
Trump’s threat surfaced mere hours before a scheduled call between EU Trade Commissioner Maroš Šefčovič and U.S. Trade Representative Jamieson Greer, aimed at establishing a basis for negotiation to prevent a full-blown trade war. This call followed the EU’s recent adjustments to its proposal in response to the U.S. administration.
Despite these efforts, reports suggest that Greer may reject the EU’s latest concessions, insisting instead on unilateral concessions from the EU, highlighting a significant rift in trade philosophies between the two parties.
Underlying Trade Tensions
Experts note that the clash underscores deeper issues regarding trade negotiations. “Trump’s demands appear to reflect deep U.S. frustration with the EU’s professional, calm and bureaucratic approach to trade negotiations,” commented Agathe Demarais of the European Council on Foreign Relations. She emphasized that the lack of clarity regarding U.S. trade objectives complicates negotiations for EU representatives.
U.S. Treasury Secretary Scott Bessent stated that he hopes Trump’s threats will “light a fire under the EU”, criticizing the bloc for its perceived lack of commitment compared to other trading partners like Asian nations and Britain, which has already secured a trade deal with the U.S.
Trump has been particularly critical of the EU’s regulations on Big Tech and the value-added taxes imposed by member states, viewing these as non-tariff barriers that disadvantage American businesses. In response, the European Commission defended its negotiations, asserting that its proposals are serious and conducive to mutual benefit, with a focus on enhancing cooperation in key sectors such as energy and mobile networks.
As both sides prepare for further discussions, the outcome remains uncertain, with Šefčovič hoping to meet Greer in Paris in early June to explore potential paths forward.