EU leaders prepare response to Trump’s 30% tariff threat as trade war fears grow

EU delays €21bn in retaliatory tariffs as leaders seek deal with US ahead of Trump’s August 1 trade deadline

Negotiations on tariffs were upended on Saturday when US president Donald Trump warned that if a deal is not struck by the August 1 deadline, the rate on goods coming from the EU would be 30%. Picture: Piroschka Van De Wouw/Pool/AP

European trade ministers will gather in Brussels on Monday to try to formulate a response to Donald Trump's imposition of a 30% tariff on the EU, which threatens to spark a trade war.

Negotiations on tariffs were upended on Saturday when US president Donald Trump warned that if a deal is not struck by the August 1 deadline, the rate on goods coming from the EU would be 30%.

Across Europe, there is some difference about how to respond to Mr Trump's weekend letter, with French president Emmanuel Macron urging the EU to “defend European interests resolutely”, be ready for a trade war, and to stand up to the US president. Leaders in Ireland, Italy, the Netherlands, and Germany called for calm.

Irish leaders have appealed for calm with three weeks to go until the latest deadline.

On Sunday, EU Commission president Ursula von der Leyen said she would seek a negotiated settlement.

"We have always been very clear that we prefer a negotiated solution. This remains the case and we will use the time that we have now until August 1,” said Ms von der Leyen.

Ms von der Leyen added that a suite of retaliatory EU measures due to kick in on Monday would be delayed pending the outcome of talks with the US. Those measures would hit US goods to the tune of €21bn.

At the National Day of Commemoration in Dublin, Taoiseach Micheál Martin said Mr Trump's letter had been "worrying" and that a trade war would have damaging effects.

"Clearly, 30% is not sustainable or tenable," he said. However, he said it is important that Europe not "overreact to every statement" and that Europe has countermeasures available should it choose to use them. He said that scenario would not be bad for consumers and businesses.

It would damage everybody, and the world would suffer because of the enormous trading relationship between the EU and US. So, it would be a very significant deterioration.

Speaking at the same event, Tánaiste and minister for trade Simon Harris said that the letter sent by Mr Trump was "unhelpful, because it's escalatory, but I think it also doesn't change anything in the here and now".

He said the deadline was always August 1 and "remains the first of August and looks to me like a negotiating tactic by Donald Trump".

"We prefer to do our negotiations around the table. He tends to do his negotiations on Truth Social and he can do it however he wishes, [but] from a European perspective and an Irish perspective, we're continuing to intensively engage. 

"I was in contact overnight with the EU trade commissioner Maroš Šefčovič speaking to him on a very regular basis," Mr Harris said.

Mr Harris said that the Government had not yet released models on the impact of a 30% tariff but that the 10% scenario, which he said was now "baked in", saw a 25,000 fewer jobs created than the 100,000 added in a no-tariff scenario and the rate of economic growth slowing.