Europe Warns of Counter-Tariffs as Trump Threatens 50% Duties on EU Goods

By Madelaine Panganiban

Updated: Jul 07 2025, 05:20 AM EDT

Europe Warns of Counter-Tariffs as Trump Threatens 50% Duties on — Flags of France (blue, white, red tricolor), the European Union (blue with yellow stars), the United States of America and the Zimmer Biomet company flutter in the sky in front of the entrance to the Biomet France company belonging to the American group Zimmer Biomet, one of the world leaders specializing in the design, manufacture and marketing of orthopedic implants, biomaterials, cementing products and medical devices, on the Lautagne plateau in Valence, France, on April 3, 2025. NICOLAS GUYONNET/Hans Lucas/AFP via Getty Images/Getty Images

The European Union is preparing to strike back if former US President Donald Trump moves forward with a massive 50% tariff on European imports.

Trump's warning has sparked serious concern across the EU, with leaders now weighing their options ahead of a crucial July 9 deadline.

Trump had already set a 20% import tax on all EU-made products in April, but paused it at 10% to give both sides time to negotiate. Now, frustrated by the pace of talks, he has threatened to raise it even higher.

"If we end up with high tariffs... we will be forced to increase our US-based production," said LVMH CEO Bernard Arnault, whose luxury brands include Louis Vuitton and Moët & Chandon. "It will be the fault of Brussels, if it comes to that."

The EU Commission says it's still hoping to reach a deal but warned it's ready to respond with tariffs of its own.

According to AP, these counter-tariffs could target hundreds of American products like cars, beef, beer, and Boeing airplanes.

Trade between the US and EU is massive — about $2 trillion worth of goods and services were exchanged last year.

America's top exports to Europe include crude oil and aircraft, while Europe sends over cars, medicines, and wine.

Tensions rise between the EU and US ahead of a July 9 deadline to avoid major tariffs. European firms are urging US officials to block Trump’s proposed 50% tariffs on EU goods, which would impact many US imports from Europe.@SaroyaHem reports pic.twitter.com/XiexDuzrpJ
— WION (@WIONews) July 4, 2025

US to Send Tariff Letters to 100 Countries Starting Monday

While Trump argues the US is at a trade disadvantage, experts say that's only partly true.

Europe does have a goods surplus, but the US sells more services, like tech and finance, which helps balance the books.

Still, some US companies are bracing for price hikes. German automaker Mercedes-Benz warned it may have to raise prices in coming years.

Italian company Campari said it might keep prices steady on some drinks just to stay ahead of competitors.

Treasury Secretary Scott Bessent confirmed on Sunday that around 100 countries will receive tariff letters starting Monday, TheNation said.

Trump told CNN that deals are already in place with the UK, China, and Vietnam, and more are coming.

"We'll have deals with most countries by July 9," Trump said.

If no deal is made, both the US and EU economies could take a hit. Experts estimate the US might lose 0.7% of its economic output, while the EU could lose 0.3%.

"The road to an agreement could be rocky," said German economist Holger Schmieding, "but US consumers will feel it the most if this turns into a full-blown trade war."