The European Union has reaffirmed its readiness to strike a deal with the United States to avoid sweeping new tariffs, even as President Donald Trump cast doubt on any imminent agreement by threatening fresh levies on multiple US allies.
EU trade spokesperson Olof Gill said Brussels remains “fully locked and loaded” to finalise a trade pact with Washington, but acknowledged the uncertainty created by the latest rhetoric from the White House. “We remain prepared for all scenarios,” Gill told reporters, adding that the bloc is working closely with member states and industries on contingency plans.
Earlier this week, expectations had been high that the US and EU were on the verge of concluding an agreement to prevent the reinstatement of 20% tariffs — or higher — on European goods. But those hopes were thrown into question when President Trump extended the tariff deadline for multiple trade partners from July 9 to August 1 and warned that new tariffs on the EU could be announced “today or tomorrow.
In response, the EU has prepared retaliatory duties worth an estimated €21 billion on US goods. These were previously suspended but could be reactivated quickly depending on how talks unfold. “If a political decision is made to extend the suspension, then we extend the suspension. There’s no difficulty doing that,” Gill noted.
Trump’s latest threats come amid a broad expansion of his protectionist trade agenda. This week, the president confirmed plans to impose a 35% tariff on Canadian imports starting August 1 — up from an earlier 25% — and hinted at blanket tariffs of 15% to 20% on most remaining trade partners. A letter published on his social media platform Truth Social accused Canada of contributing to the fentanyl crisis and imposing unfair trade practices, particularly in the dairy sector.
Canadian Prime Minister Mark Carney responded by reaffirming his commitment to defending Canadian businesses and workers. “We are committed to continuing to work with the United States to save lives and protect communities in both our countries,” he posted on X (formerly Twitter).
Trump has also introduced new levies on copper and signalled tariff hikes on Japan, South Korea, and others, raising fears of a broader trade war. “The potential escalation between the EU and the US is a big deal for financial markets,” said Joseph Capurso, head of international economics at Commonwealth Bank of Australia.
With the EU bracing for potential economic fallout and Canada seeking to salvage trade talks before a self-imposed July 21 deadline, the prospect of renewed tariff skirmishes is sending shockwaves through global markets. Observers now await President Trump’s next move — and whether diplomacy can prevail before the August 1 deadline.
