EU faces a dilemma of retaliation or recession risk in its trade dispute with the U.S. over threatened 50% tariffs.

  • The EU has temporarily halted the imposition of tariffs on €21 billion worth of US imports

  • US President Donald Trump has threatened to raise tariffs on EU imports from the initial 25% to a drastic 50%, with talks ongoing until a July deadline

  • The EU is now considering a UK‑style trade agreement with the US, which would include reciprocal 10% tariffs on goods, with plans to later negotiate and reduce tariffs on sensitive items like steel and cars

The EU has paused clawing back on €21 billion of US imports such as steel, aluminum, cars, motorcycles, and poultry, to allow time for negotiations. However, this suspension expires on July 14, which is less than a month from today, so the EU is now in a dilemma between retaliation or recession risk.

Originally, US President Donald Trump threatened to raise tariffs on EU imports from the initial 25% to a drastic 50%, with talks ongoing until a July deadline. Due to this, Brussels has prepared its response, an extensive €21 billion list of counter-tariffs that could potentially expand to €95 billion in wider goods if no agreement is reached by mid-July.

Currently, there’s a predicament in the EU with som…

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