The European Union announced on Sunday that it would extend its suspension of counter-tariffs on U.S. goods until early August, seeking more time to secure a negotiated trade deal.
This decision comes in response to U.S. President Donald Trump’s declaration that a 30% tariff will be imposed on most EU and Mexican imports beginning August 1.
The move has escalated tensions and created urgency among trading partners to finalize new trade frameworks.
White House Stands Firm
White House Economic Adviser Kevin Hassett said on ABC’s “This Week” that the offers made by other countries have not met President Trump’s expectations.
“The president thinks that deals need to be better,” Hassett said, adding that the threatened tariffs are real unless improvements are made quickly.
EU Seeks Balanced Response
European Commission President Ursula von der Leyen reiterated the bloc’s preference for dialogue but confirmed that preparations for retaliatory measures are ongoing.
“We have always been very clear that we prefer a negotiated solution,” she said, emphasizing that the suspension would remain in place until August to allow for further discussions.
Von der Leyen also noted that the bloc was not yet invoking the Anti-Coercion Instrument, a powerful trade tool reserved for extreme cases.
Germany and France Split on Tactics
The response to the U.S. move could test unity within the EU.
German Chancellor Friedrich Merz expressed a commitment to finding a solution, warning that the tariffs would severely disrupt Germany’s export-driven economy.
“If that were to happen, we would have to postpone large parts of our economic policy efforts,” he said.
In contrast, French President Emmanuel Macron urged stronger resistance, calling for the EU to assert its interests and consider using anti-coercion measures if talks fail.
Retaliatory Packages Ready
Two sets of retaliatory measures have been prepared by the EU.
The first targets $21 billion in U.S. goods in response to previous U.S. steel and aluminum tariffs.
This package was paused in April for 90 days to allow negotiations and was due to expire on Monday before the recent extension.
A second, more extensive set of measures could impact up to $72 billion in U.S. exports, although the full list has not yet been disclosed and requires approval from member states.
Trade War Still Avoidable
Despite the rising tensions, the EU continues to signal its preference for resolution through dialogue.
Von der Leyen emphasized that the anti-coercion tool was not yet necessary, and diplomatic talks remained the best route.
Meanwhile, a political agreement with Indonesia signals the bloc’s intent to broaden trade relationships amid growing uncertainty with the U.S.