The #US & the #EU, a trading bloc of 27 nations that make up the world’s third-largest economy, do a huge amount of #trade in goods & services. Given their close ties, European ofcls had been hoping they could manage to strike a deal w/their Us counterparts to avoid such steep levies.

EU trade commissioner Maros Sefcovic, has been in regular contact w/the US #commerce secy & trade rep. #EC president Ursula #vonderLeyen has spoken to #Trump. Ofcls thought they were on the cusp of a deal.

#EU policymakers had gradually come around to the possibility that the bloc could face 10% across-the-board #tariffs on all goods sent to the #US, & were hoping to negotiate exceptions for important products. Many were eager to end the economic #uncertainty that #Trump’s #trade announcements had unleashed on German carmakers, Italian wine exporters & Irish pharmaceutical companies alike.

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But things changed w/Trump’s announcement on Sat of a flat 30% tariff, & his threat to make that rate even higher should the #EU retaliate.
“If for any reason you decide to raise your #tariffs & retaliate, then, whatever the number you choose to raise them by, will be added onto the 30% that we charge,” #Trump wrote in the letter, which echoed a form letter he has been sending out to many #US trading partners announcing tariff rates.

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If #Trump is serious about such steep #tariffs, it could have serious consequences for the relationship between the #EU & the #US, which are historically intertwined & deeply integrated economically.

If the tariffs rates remain, “that means #TradeWar,” said Jacob Funk Kirkegaard, a senior fellow at the economic think tank Bruegel in Brussels.

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He did not think that Trump’s warning against retaliation would have much effect on the #EU’s appetite to hit back. He said the best #Europe can hope for is a situation in which many of America’s global trading partners retaliate, perhaps in a coordinated way, & #Trump is pressured to strike a less extreme stance.

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Update:

In reaction to #Trump’s 30% tariffs on the #EU, EC president Ursula #vonderLeyen said in a statement that such #tariffs “would disrupt essential transatlantic #SupplyChains, to the detriment of #businesses, #consumers & #patients on both sides of the Atlantic.” She also threatened to hit back, though she did not make a retaliation sound imminent, talking about the “adoption of proportionate countermeasures if required.”

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