U.S. holds firm on August 1 tariff deadline for EU

July 21, 2025 (MLN): The United States has reaffirmed its commitment to enforcing a planned tariff hike on the European Union starting August 1, as both sides race against time to finalize a trade agreement.

U.S. Commerce Secretary Howard Lutnick stated over the weekend that while he remains confident a deal can be reached, the 30% baseline tariff on EU imports will go into effect as scheduled.

“That’s a hard deadline, so on August 1, the new tariff rates will come in,” Lutnick said Sunday on CBS News when asked about the deadline for EU tariffs.

“Nothing stops countries from talking to us after August 1, but they’re going to start paying the tariffs on August 1,” he added.

While Lutnick acknowledged that negotiations could continue beyond the deadline, he emphasized that the U.S. would begin collecting tariffs regardless.

He added, “These are the two biggest trading partners in the world, talking to each other. We’ll get a deal done. I am confident we’ll get a deal done.”

The European Union, meanwhile, has warned of retaliatory measures if the U.S. imposes punitive trade tariffs, as CNBC reported.

Lutnick downplayed such threats, dismissing the idea that the EU would target U.S. goods like Boeing airplanes or Kentucky bourbon, stating, “they’re just not going to do that.”

Last-minute negotiations are ongoing, with the EU aiming to secure a reduced tariff rate, similar to the deal previously made with the United Kingdom.

The U.K.–U.S. trade agreement includes a 10% baseline tariff and specific terms covering car, steel, and aerospace imports.

However, economists and analysts are increasingly skeptical about the EU’s ability to replicate the U.K. deal, citing the complex dynamics between the EU and U.S. President Donald Trump.

Trump has long criticized what he calls unfair trade practices and an imbalanced trade relationship with the EU—accusations the bloc denies.

According to the European Council, total trade between the U.S. and EU amounted to 1.68 trillion euros ($1.96tr) in 2024.

While the EU ran a trade surplus in goods, it posted a deficit in services, leading to an overall surplus of around 50 billion euros last year.

On Friday, the Financial Times reported that Trump was pushing for a minimum 15% to 20% tariff on EU imports in any future deal.

He is also reportedly willing to retain a 25% duty on auto sector imports, which would significantly affect German car exporters.

The White House’s more aggressive stance toward Brussels has caused concern among EU policymakers, who are weighing potential responses to the 30% tariff, a sharp increase from the current 10% duty introduced in April.

An EU official told CNBC that all EU member states, except Hungary, led by Trump ally Viktor Orban—are now aligned in preparing a response.

The EU’s planned countermeasures include tariffs on 21 billion euros worth of U.S. imports, currently paused until August 6, and a second wave of tariffs targeting 72bn euros in trade.

Affected items could range from clothing to agricultural products and food and drink.

In addition, The Wall Street Journal and Bloomberg reported that a growing number of EU member states are backing the use of the bloc’s anti-coercion instrument.

 This is a powerful trade tool that grants the European Commission broad authority to retaliate against the U.S. in response to coercive trade actions.

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