EU says it could retaliate against US tariffs if no trade deal is reached
Negotiators from the EU have worked for weeks to strike a deal with the Trump administration. In a statement on July 12, the European Commission said it would continue to work toward a resolution.
"At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required," European Commission President Ursula von der Leyen said in a statement.
The EU paused planned countermeasures on more than $24 billion of goods from the United States in April after Trump delayed an announced tariff hike for 90 days amid trade negotiations. However, after Trump unveiled a 30% tariff for the European Union on July 12, the 27-country bloc suggested it might retaliate in kind.
French President Emmanuel Macron was among the European officials pushing for the commission to "resolutely defend European interests," in a statement in which he said negotiations must intensify.
"In particular, this implies speeding up the preparation of credible countermeasures, by mobilising all the instruments at its disposal, including anti-coercion, if no agreement is reached by August 1st," he wrote on X.
Tariff latest: Trump announces 30% tariffs on Mexico, European Union
The office of Italian Prime Minister Giorgia Meloni urged the negotiating parties to stay focused on a deal and warned against launching a trade war.
"We trust in the goodwill of all the parties involved to reach a fair agreement, able to strengthen the West in its entirety, as it would make no sense to spark a trade war between the two sides of the Atlantic, especially in the current context," the Italian government said. "It is now essential to remain focused on the negotiations, avoiding polarisations that would make reaching an agreement more complex."
In his letter to Von der Leyen, Trump said that if the bloc were to "raise your Tariffs and retaliate, then, whatever the number you choose to raise them by, will be added to the 30% that we charge." He included similar language in letters he sent to roughly two dozen other leaders this month.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
27 minutes ago
- Yahoo
AP Top Extended Financial Headlines at 2:45 p.m. EDT
The European Union has decided to hold off on imposing retaliatory tariffs on U.S. goods that were set to begin Monday Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
San Francisco Chronicle
an hour ago
- San Francisco Chronicle
Trump to make unprecedented second state visit to UK in September
LONDON (AP) — U.S. President Donald Trump will make an unprecedented second state visit to the U.K. between Sept. 17 and 19 when he will be hosted by King Charles II and Queen Camilla at Windsor Castle, Buckingham Palace said Monday. Trump, who is a big supporter of the royal family, particularly of the monarch, will be accompanied by his wife, Melania Trump during the three-day visit, the palace confirmed. No U.S. president has been invited for a second state visit. Trump previously enjoyed the pomp and pageantry of the state visit in 2019 during his first term when he was hosted by Charles' late mother, Queen Elizabeth II. The invitation for the second state visit from the king was hand-delivered by British Prime Minister Keir Starmer in February during a meeting at the White House. After reading it, Trump said it was a 'great, great honor' and appeared particularly pleased by the fact he will be staying at Windsor Castle, to the west of the capital. 'That's really something,' he said. Precedent for second-term U.S. presidents who have already made a state visit is usually tea or lunch with the monarch at Windsor Castle, as was the case for George W. Bush and Barack Obama. State visits are ceremonial meetings between heads of state that are used to honor friendly nations and sometimes smooth relations between rivals. While the king formally issues the invitation for a state visit, he does so on the advice of the elected government. The visit is seen as part of Starmer's effort to keep Trump close and lessen the impact of some of his polices on the U.K. The relationship between the two appears amicable, and has helped the U.K. from facing the sort of hefty U.S. tariffs that other nations are seeing. But like Trump's previous visit, it's unlikely he will be welcomed by all. Last time, a day of protests saw the flying of a giant blimp depicting Trump as an angry orange baby from outside Parliament. Lawmakers from Starmer's Labour Party have also questioned whether the honor should be extended to Trump at a time that he is supporting Israel's war in Gaza and threatening the sovereignty of allies such as Canada and Greenland. Charles could also face some challenges during the visit because he is head of state of both the United Kingdom and Canada, which Trump has suggested should become the 51st U.S. state. During a speech to the Canadian parliament in May the king highlighted Canada's 'unique identity' and 'sovereignty,' while echoing the words of the country's national anthem when he said 'The True North is indeed strong and free.' State visits to Britain are particularly prized by heads of state because they come with a full complement of royal pomp and circumstance, including military reviews, carriage rides and a glittering state banquet hosted by the monarch.
Yahoo
an hour ago
- Yahoo
A $100 billion mystery is unfolding on tariffs and inflation and economists are cracking the case
Economists have for months warned that tariffs would cause an inflation surge, but as of July, there's little evidence of that in economic data, despite about $100 billion in tariffs already collected by the Treasury. Fortune asked economists to explain why. The possible reasons range from 'it's too soon' to 'consumers won't stand for it.' Since the first weeks of President Donald Trump's second term, when the president signaled a wholesale reimagining of the international trade system on a scale not seen in decades, mainstream economists have warned that prices would surge. The mantra, repeated by everyone from mainstream economists to factions of the GOP, has been clear: A tariff is a tax on consumers. Businesses said the same, with three -quarters of importers in a recent New York Fed study declaring they planned to pass on some tariff costs to customers. But halfway into the year and well into the most consequential reshuffling of trade in half a century, tariff-fueled inflation is missing in action. The tariffs are certainly in place: The Treasury so far has collected a record-setting $100 billion in customs duties, and is on track to pull in $300 billion this year. The tariffs are paid by U.S. importers—think Walmart and other retailers—when goods cross the border into the U.S. It takes some time to work their way into the system, but eventually higher prices get passed onto consumers. Those higher prices directly influence the overall price levels in inflation measures. Except there's a mystery, wrapped in an enigma, and coated in a puzzle. One place tariffs aren't showing up? In the inflation numbers. For four months, official inflation readings from the Bureau of Labor Statistics have come in under expectations, with the latest inflation reading a relatively modest 2.4%. The president's Council of Economic Advisers (CEA) this week released a brief arguing that import prices have actually been falling. Why doesn't the data show a tariff hit? Here's what leading economists told Fortune. Though tariffs have been discussed for months, they haven't actually been in place for that long. 'Regarding the impact of tariffs on prices, the timeframe used by the CEA is way too short to draw any definitive conclusions,' said the fiscally conservative National Taxpayers Union said in a critique on the study, which looked at prices through May. 'Trump's 10% nonreciprocal tariffs were only imposed in April.' Tariffs on steel and aluminum went into effect in March and increased in June, while Chinese imports have been subject to a 30% tax since March; dozens more 'reciprocal' tariffs, initially announced in early April, have now been postponed. Meanwhile, official government price data takes time to collect and release. As of mid-July, the most recent data for the Consumer Price Index and Personal Consumption Expenditures deflator, covers May. Immediately after tariffs were announced, importers rushed to bring in goods before they were subject to a higher rate. Businesses brought in so many goods, with no corresponding sales, that it briefly flipped the U.S.' GDP into negative territory. (In economist math, imports count as a negative to GDP.) That surge means that businesses could still be largely selling goods brought in under pre-tariff prices. 'Businesses stockpiled inventory, and presumably haven't had to raise prices on goods because they're sitting on the shelf. Eventually they will, and once they start to raise prices it'll start impacting consumers,' said Eric Winograd, chief U.S. economist at AllianceBernstein, to explain this theory. Uncertainty, in a word, is 'the most important reason' the hard data doesn't yet show tariff impact, according to Eugenio Aleman, chief economist at Raymond James. 'Business owners price their goods at replacement cost. If they have to buy the same good in the future, they have to increase the price [charged to the customer] if the price of the replacement is higher,' he told Fortune. The problem, though, is uncertainty. 'Everybody knows the prices that firms will pay for replacement goods will be higher, but nobody knows by how much. That uncertainty is keeping many firms from repricing their goods.' Businesses, particularly small businesses, could be choosing to eat the cost of tariffs for the time being. Unlike large businesses, they have a smaller client base and could be reluctant to hike prices, Aleman said. 'Maybe small firms are eating some large portion of the tariffs. Why? Because they can't afford to lose clients,' he said. One potential data point indicating this possibility is recent Commerce Department figures showing growth in proprietors' income—a proxy for small businesses—flatlining in May. Aleman stressed that more than one month of data would be needed to determine if this is the case. Recent Bank of America research shows the amount of tariffs paid by small businesses in May nearly doubled from 2022 levels. 'Small businesses may be, in some ways, more susceptible to tariff pressures than larger businesses, given their access to capital is more limited,' the note read. An added factor is the bully pulpit of Truth Social, which Trump has wielded freely at even the largest retailer thinking of hiking costs. 'If the president sees significant pass-through of tariffs via prices, you'll see a lot more public policy, probably via Twitter,' Jeff Klingelhofer, a managing director at Aristotle Pacific, told Fortune. Klingelhofer previously suggested that companies would take the brunt of the tariff impact because they're the only ones who could afford to, with consumers being 'tapped out' after years of high inflation. Former Federal Reserve economist Claudia Sahm also noted that companies today are less quick to hike prices now than they were during pandemic inflation, when Americans were flush with cash and eager to spend it. In 2021 and 2022, 'consumers up and down the income distribution, had some cash, and there were a lot of corporate earnings calls saying 'We're passing these [costs] through,' and the consumer could kind of handle it,' she told Fortune. Three years later, Americans have spent all the excess savings accumulated during Covid, and businesses 'realize if they increase prices dramatically, they could be losing customers,' she said. 'There is more hesitation. There is some raising of prices, but not the exuberance' of the pandemic. That's the position of Mark DiPlacido, policy advisor at American Compass, a conservative economic outfit that supports tariffs as a way to rebalance the U.S. economy. 'Foreign exporters have ended up absorbing a lot of [the costs], and businesses—very little has gotten to consumers at this point,' he said. Japanese carmakers, he noted, are slashing prices—sometimes nearly 20%—to compensate for the added costs U.S. buyers will pay. In other words, 'Japan itself and Japanese companies are eating the costs of the tariffs.' Every economist Fortune spoke with made some version of this point—that a tariff, rather than giving a blank check for a seller to boost prices, sets off a complicated negotiation between importers, exporters, and American end buyers. Finding the balance of which party pays how much will take time, and will be individual for each good and sector of the economy. 'Tariffs are a tax on imported goods,' Sahm said. 'Nobody wants to pay the tax, so who is the weakest link? Walmart can go in and tell their Chinese producers, 'You have to cut the price.' Maybe in the pandemic the consumers said, 'OK, I'll pay it—I'm not really happy about it, but I have the money.' The final answer, she added, 'can be very specific to the business, the industry, and also the general macroeconomic conditions.' This story was originally featured on Sign in to access your portfolio
