The European Union is gearing up for a major trade battle with Washington. Following President Donald Trump’s recent warning of looming 30% tariffs on European goods, the EU is launching a diplomatic push — and looking for allies.

According to Bloomberg, the EU is preparing to initiate talks with key partners such as Canada and Japan, aiming to coordinate a united response and build a common strategy to counter the U.S. tariff threat.

⏳ Moratorium Until August 1 – Then Retaliation?

European Commission President Ursula von der Leyen confirmed that the existing moratorium on reciprocal tariffs would be extended until August 1. “We’re buying time. But at the same time, we are ready to act,” she said in Brussels.

Behind the scenes, a massive €96 billion ($104 billion) retaliatory package targeting American goods is already prepared. The plan includes both tariffs and export controls. EU capitals such as Germany and France are expected to greenlight the measures early this week.

Macron and 🇩🇪 Merz Warn: Unity is Essential

French President Emmanuel Macron urged fellow EU leaders via social media to act decisively if no agreement is reached with the U.S. by August 1. In Berlin, Chancellor Friedrich Merz warned that a 30% surcharge on EU exports would "cut to the bone."

“We need unity in the EU – and smart dialogue with the American president,” Merz emphasized.

✉️ Trump Letters Dampen Hopes

Meanwhile, President Trump sent letters to several trade partners, revising his earlier tariff proposals and calling for renewed dialogue. One of the letters, released Saturday, warned the EU of a 30% tariff starting next month unless better terms are reached.

Sources say the EU’s goal is to limit agricultural tariffs to 10% or less. A previously discussed plan linking U.S. investments to tariff relief for EU automakers has been shelved amid fears of triggering offshoring.

🚗 Autos, Medtech, and Copper Also at Risk

Talks are now focusing on vehicle and parts tariffs, with Trump having already announced a 25% levy. Upcoming surcharges are expected to affect pharmaceuticals, semiconductors, and copper as well.

The EU is pushing for exemptions on wine and spirits, as well as quota relief for metals, currently under 50% tariffs.

📉 Euro Drops as Markets Downplay Trade Tensions

Despite the stakes, markets remain mostly calm. On Monday morning, the euro dipped to a three-week low, while the Mexican peso and the Australian and New Zealand dollars also fell. Investors are now focused on Tuesday’s U.S. inflation data, which could guide future Federal Reserve decisions.

Trump also stated that Fed Chair Jerome Powell stepping down would be "a great thing", adding pressure on the central bank. Traders expect a 50-basis-point rate cut by the end of the year.

China Speeds Up Exports as Yuan Remains Weak

Chinese exports surged in June as firms rushed to ship goods ahead of the August tariff deadline. Yet, the yuan remains weak, trading at around 7.17 per U.S. dollar.

All eyes are now on China’s Q2 GDP data, due Tuesday, as investors seek clarity on whether growth has slowed due to rising trade tensions and deflationary pressure.



#TRUMP , #Tariffs , #TradeWars , #TradingCommunity , #Geopolitics

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