Trump's threatening letter, in which he announced 30% tariffs on EU goods, has brought additional anxiety. New negotiations are expected, but only until August 1. How will the dispute continue and what are the most important issues in it.
The new letter from Donald Trump, in which he threatens to impose a 30% tariff on imports from the EU, has further exacerbated the US trade dispute with Europe. In Brussels, where they had hoped for a significantly lower tariff rate, they see this as a new provocation on Trump's part. But European Commission (EC) President Ursula von der Leyen seems determined not to succumb to this provocation, writes German public media outlet ARD.
No retaliatory measures from Brussels for now
The EU will continue the negotiations, Von der Leyen said: "We have always made it clear that we want a negotiated solution." This means that for now the EU will not impose countermeasures. Germany is one of the countries that wants the negotiations to continue, as Chancellor Friedrich Merz explained in an interview with ARD.
What does Trump's letter to von der Leyen say?
Trump announced that from August 1, the US would impose a basic tariff of 30% on imports from the EU - in addition to the sectoral tariffs that already apply to imports of cars and car parts, as well as steel and aluminum products.
The US president also made it clear that he expects American companies to import their goods duty-free into the EU. If the EU imposes counter-tariffs, Trump warned that he would add this percentage to the already announced 30% for European imports.
Do the new basic tariffs apply to all sectors?
No. According to the White House, the automotive and steel industries, among others, are excluded from them. When asked by the German news agency DPA, the US government replied: "Sectoral tariffs are treated separately and are not cumulative". The US currently imposes a 25% tariff on cars and car parts from the EU and a 50% tariff on steel and aluminum imports, ARD recalls.
A heavy blow to export-oriented economies
What exactly will the implementation of the new rates mean?
This will be a particularly heavy blow to the export-oriented German economy, as tariffs usually make products more expensive and block trade. The economy has already suffered from the tariffs already introduced by Trump - a basic tariff of 10%, 25% - for cars and car parts, as well as 50% for steel and aluminum.
Companies are already suffering seriously from this. “The costs are in the billions and are increasing every day”, Hildegard Müller, chairwoman of the German Automotive Industry Association (VDA), told ARD.
How does Trump justify the need for higher rates?
According to the US president, European tariffs and other trade barriers have caused the US to run a trade deficit that poses a significant threat to the US economy and national security. By defining this as a national security risk, Trump can bypass the US Congress, which would otherwise have to approve his tariff policy.
How big is this deficit?
According to the latest Eurostat data, in 2024 the EU registered a significant surplus of around €198 billion in its trade with the US: around €533 billion worth of goods were exported to America, while imports from the US were around €335 billion. If we deduct from this the trade surplus that the US has in the services sector, it turns out that the total deficit for the US in its trade in goods and services with Europe is no more than 50 billion euros. "This corresponds to less than three percent of total trade between the EU and the US", Brussels points out in this regard. For Trump, however, only goods and raw materials are important and in his arguments for tariffs he always ignores the market power of American technology giants such as Apple or Google, ARD points out.
What are they hoping for in Brussels
Why is the EU refraining from stronger pressure?
The EU still considers it realistic to reach an agreement with the US by August 1. That is why the retaliatory European tariffs, which were supposed to come into effect today (July 14), are being postponed until August 1.
Brussels is refraining from measures that could escalate the trade dispute, mainly for two reasons: there are concerns that this could prompt Trump to make other threats - for example, by once again questioning the obligation to provide military assistance within NATO or reducing support for Ukraine. Both issues are extremely sensitive in view of the threat from Russia.
What do the US think about the tariffs?
The tariffs will also seriously affect consumers in the US, as they will have to pay more for imported products. This creates some uncertainty in the US economy. But overall, investors seem to trust Trump, as an additional 100 billion US dollars have been collected so far as a result of his punitive tariffs, ARD and DPA point out. In addition, prices in the US have not yet risen significantly and massively. So far, American companies are paying the tariffs and have not yet passed them on to their customers. But at some point they will have to do so.
Why are there tariffs at all?
On the one hand, tariffs are a welcome source of revenue for the state, which earns money from each shipment from abroad and can thus finance public spending.
On the other hand, tariffs serve to protect the national economy: imported goods become more expensive - this makes domestic products more competitive and protects local companies. This is intended to stimulate domestic production. And high export duties ensure that certain goods and products remain in the country.