President Donald Trump has announced the European Union and Mexico will be hit with 30% tariffs on imports to the US from August 1, after he failed to reach a trade deal with the nations.
Trump’s latest salvo on Saturday surprised the EU, the United States' largest trading partner, which had hoped to avoid an escalating trade war after intense negotiations and increasingly warm words from the White House.
The EU stood firm following Trump’s announcement and said it was ready to retaliate to defend its interests if the United States pressed ahead with imposing a 30% tariff on European goods.
President of the European Commission Ursula von der Leyen said the bloc was ready to keep working towards an agreement before the new measures could be introduced.
"We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required," she said of possible retaliatory tariffs on US goods entering Europe.
Meanwhile, Mexican President Claudia Sheinbaum said on Saturday she is sure an agreement can be reached with the US before Trump’s latest tariffs could take effect.
Speaking during an event in the Mexican state of Sonora, Sheinbaum added that Mexico's sovereignty is never negotiable.
EU ambassadors will discuss next steps on Sunday, before trade ministers meet in Brussels on Monday for an extraordinary meeting.
They will need to decide whether to impose tariffs on 21 billion euros of US imports in retaliation against separate US tariffs against steel and aluminium, or extend a suspension which lasts until the end of Monday.
The EU has so far held back from retaliating against the US, although it has readied two packages that could hit a combined 93 billion euros of US goods
European capitals swiftly backed von der Leyen's position.
German Economy Minister Katherina Reiche called for a "pragmatic outcome to the negotiations".
Trump's proposed tariffs "would hit European exporting companies hard. At the same time, they would also have a strong impact on the economy and consumers on the other side of the Atlantic," she said.
French President Emmanuel Macron said on X that the European Commission needed more than ever to "assert the Union's determination to defend European interests resolutely".
Retaliation might need to include so-called anti-coercion instruments if Trump did not back down, Macron said.
The tool, drawn up during Trump's first term and used against China, allows the EU to go beyond traditional tariffs on goods and impose restrictions on trade in services if it deems that a country is using tariffs to force a change in policy.
Spain's Economy Ministry backed further negotiations but added that Spain and others in the EU were ready to take "proportionate countermeasures if necessary".
Trump has periodically railed against the EU, saying in February it was "formed to screw the United States".
His biggest grievance is the US merchandise trade deficit with the EU, which in 2024 amounted to $235 billion, according to U.S. Census Bureau data. The EU has repeatedly pointed to a U.S. surplus in services, arguing it in part redresses the balance.
Combining goods, services and investment, the EU and the United States are each other's largest trading partners by far. The American Chamber of Commerce to the EU said in March the trade dispute could jeopardise $9.5 trillion of business in the world's most important commercial relationship.
Bernd Lange, head of the European Parliament's trade committee said he was now convinced the first stage of countermeasures should come into force on Monday, followed quickly by the second package.
Trump has said he would mirror any retaliatory moves.
Still, Trump has repeatedly announced sweeping tariffs in recent months, only to row back or suspend them before his own self-imposed deadlines.
The expectation that he will again relent has led to increasingly muted responses on financial markets, which have recovered since plunging after his initial "Liberation Day" announcement of big global tariffs in April.
Three EU officials who spoke on condition on anonymity told Reuters they saw Trump's latest threats as a negotiating ploy.
