A 30% tariff on Europe would effectively knock out transatlantic trade, says EU trade chief
A tariff of '30%, or anything above 30%… has more or less the same effect. So, practically it prohibits the trade,' Maroš Šefčovič, the EU's trade commissioner, said as he arrived ahead of an EU ministerial meeting in Brussels on Monday.
Šefčovič said it will 'be almost impossible' for the bloc to continue its current level of trade with America if that new tariff rate is implemented on August 1 – the date stipulated by US President Donald Trump in his letter to the EU on Saturday.
'If (the tariff) stays 30 (percent) plus, simply trading as we know it will not continue, with huge negative effects on both sides of the Atlantic,' he added. 'I will definitely do everything I can to prevent this super-negative scenario.'
The EU-US trade relationship is mighty. According to the European Council, EU-US bilateral trade in goods and services was worth €1.68 trillion ($1.96 trillion) last year. Together, the partners represent nearly 30% of global goods and services trade, per the Council.
But Trump has repeatedly rebuked the EU for what he sees as unfair trading practices, saying in April that the 27-nation bloc was 'formed to screw' America. He has pointed to EU tariffs on US goods as well as several 'non-tariff barriers' such as taxes on digital services to support that view.
Since re-taking office in January, Trump has hiked – and threatened to hike – tariffs on countries around the world to help eliminate the US' trade deficit, bring manufacturing jobs back to America and bring foreign nations to heel on key disputes.
For months, EU trade officials have been negotiating with their US counterparts to avoid Trump's tariffs, or to limit their damage. But after the US president threatened in May to jack up the rate of his so-called 'reciprocal' levy on EU goods from 20% to 50%, the bloc accelerated talks.
Šefčovič reiterated on Monday that the EU seeks a negotiated solution as well as his belief that one had been within touching distance before Trump's latest tariff salvo. 'The feeling on our side was that we are very close to an agreement,' he said, noting that the bloc is demonstrating 'enormous' levels of patience and creativity to secure a deal.
On Sunday, the EU said it will delay the implementation of planned countermeasures on €21 billion ($25 billion) worth of US exports from Monday until early August to allow more time to negotiate an agreement. Those countermeasures are in retaliation for the 25% tariff Washington has slapped on all steel and aluminium imports.
Lars Løkke Rasmussen, Denmark's foreign minister, said the bloc wants a fair deal and that it should prepare to retaliate.
'If you want peace, you have to prepare for war, and I think that's where we are. So, of course, we shouldn't impose countermeasures (at) this stage, but we should prepare to be ready to use all the tool in the toolbox,' Rasmussen said before the meeting of EU trade ministers on Monday.
European stocks were falling Monday morning in the first day of trade since Trump issued his new tariff threat over the weekend. The Stoxx Europe 600, the region's benchmark index, was trading 0.27% lower by early afternoon CET.
David Goldman contributed reporting.
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It has taken six months and the deaths of thousands of Ukrainians but now, at last, Donald Trump may have grasped the truth about Vladimir Putin. As he threatens new sanctions and denounces Putin as 'crazy', the president is finally working out that Russia's leader is implacably determined to conquer Ukraine and rebuild an empire, at whatever cost in blood. But Trump is not alone in having lessons to learn: so, in all honesty, does the Foreign Office. Ever since Putin launched his full-scale invasion in February 2022, our diplomats have been at the forefront of backing Ukraine and maximising the pressure on Russia. They saw the onslaught coming and their response has won immense goodwill for Britain among Ukraine's government and people. On Friday, the Foreign Office named and sanctioned 18 Russian spies accused of covert bombings or acts of sabotage in Britain and elsewhere, designed to prevent support for Ukraine. 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Howmet Aerospace Inc. HWM and General Dynamics Corporation GD are two prominent names operating in the aerospace and defense industry. As rivals, both companies are engaged in producing highly engineered aircraft components for commercial and military aircraft in the United States and companies have been enjoying significant growth opportunities in the aerospace and defense space on account of the improving air traffic trend and the expansionary U.S. budgetary policy in the past couple of years. But which one is a better investment today? Let's take a closer look at their fundamentals, growth prospects and challenges to make an informed choice. The Case for Howmet The strongest driver of Howmet's business at the moment is the commercial aerospace market. Persistent strength in air travel has been driving demand for wide-body aircraft, supporting continued OEM spending. Pickup in air travel has been positive for the company as the increased usage of aircraft spurs spending on parts and products that it provides. Revenues from the commercial aerospace market increased 9% year over year in first-quarter 2025, constituting 52% of its business. The sustained strength was attributed to new, more fuel-efficient aircraft with reduced carbon emissions and increased spare demand for the commercial aerospace market has remained a major driver for the company, the defense side of the industry has also been witnessing positive momentum, cushioned by steady government support. The company has been witnessing robust orders for engine spares for the F-35 program and spares and new builds for legacy the first quarter, revenues from the defense aerospace market increased 19% year over year, constituting 17% of the company's revenues. Improved budgetary provisions from the U.S. government set the stage for Howmet, focused on defense business, to win more contracts, which is likely to boost its top company also remains committed to increasing shareholder value through dividend payouts and share repurchases. In the first three months of the year, it paid dividends worth $42 million and repurchased shares for $125 million. In January 2025, the company hiked its quarterly dividend by 25% to 10 cents per share. Also, in July 2024, its board approved an increase in the share repurchase program by $2 billion to $2.487 billion of its common the positives, HWM has been subject to continued weakness in the commercial transportation market over the past few quarters. Demand in the commercial transportation markets served by the Forged Wheels segment is expected to remain soft till the second half of the year due to lower OEM builds. The Case for General Dynamics General Dynamics had an impressive backlog of $88.66 billion at the end of the first quarter of 2025, driven by a strong order inflow. The estimated contract value, which combines the total backlog with the potential contract value, totaled $141.33 billion at the end of the quarter. The strength of the order flow was driven by strong demand across the company's product and services from its well-established domestic market, the company enjoys significant overseas opportunities across multiple nations, particularly in Europe, for its Land Systems unit's products. In first-quarter 2025, it witnessed robust demand for its combat system products, with particular strength in U.S. fiscal budgets have played a key catalyst for the growth of General Dynamics' Marine Systems business. Notably, in May 2025, a White House report published that U.S. President Trump proposed an increase in the nation's defense spending (to $1.01 trillion) for fiscal 2026. This should bode well for GD with its strong presence in the defense shipbuilding the global supply-chain disorder plagued by disruptions, delays and shortages has impacted the company. Evidently, within its Aerospace business, supply-chain challenges forced GD to ramp up production in response to strong customer demand for its aircraft and caused out-of-sequence manufacturing. This resulted in increased costs and reduced operational efficiency for General Dynamics in Dynamics' highly leveraged balance sheet also remains concerning. Its long-term debt totaled $7.26 billion exiting first-quarter 2025, while its short-term debt was $2.35 billion. The company's cash and cash equivalents amounted to $1.24 billion, which were lower than both its short-term and long-term debt. Considering its debt profile, GD holds a weak solvency position. Price Performance In the past year, Howmet shares have soared 142%, while General Dynamics stock has gained 4.1%. Image Source: Zacks Investment Research The Zacks Consensus Estimate for HWM & GD The Zacks Consensus Estimate for HWM's 2025 sales and earnings per share (EPS) implies year-over-year growth of 8.7% and 29%, respectively. HWM's EPS estimates for both 2025 and 2026 have increased over the past 60 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for GD's 2025 sales and EPS implies year-over-year growth of 5.9% and 9.9%, respectively. GD's EPS estimates have been trending northward over the past 60 days for both 2025 and 2026. Image Source: Zacks Investment Research GD's Valuation Attractive Than Howmet General Dynamics is trading at a forward 12-month price-to-earnings ratio of 18.77X, above its median of 17.48X over the last three years. Howmet's forward earnings multiple sits at 49.21X, much higher than its median of 26.09X over the same time frame. Image Source: Zacks Investment Research Final Take General Dynamics' strength in the aerospace and defense markets has been dented by the continued supply-chain challenges arising from component shortages. The company's solid momentum in domestic and international markets adds to its strength. However, its high debt profile remains a contrast, Howmet's market leadership position and strength in both commercial and defense aerospace markets provide it with a competitive advantage to leverage the long-term demand prospects in the aerospace market. Despite its steeper valuation, HWM holds robust prospects due to strong estimates, stock price appreciation and better prospects for sales and profit these factors, HWM seems to be a better pick for investors than GD currently. While HWM currently carries a Zacks Rank #2 (Buy), GD has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Dynamics Corporation (GD) : Free Stock Analysis Report Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
