President Donald Trump’s latest threat to impose 30% tariffs on European Union imports could render normal US-EU trade relations “almost impossible”, the bloc’s chief negotiator has warned, as Brussels prepares a €72 billion retaliatory package.
Speaking after talks with EU trade ministers in Brussels, Maros Sefcovic said the sweeping tariffs—set to take effect on 1 August unless a deal is reached—would have a devastating impact on supply chains and key industries across Europe and the US.
“If you’re talking about 30 per cent or more, there will be a huge impact on trade,” Sefcovic told reporters. “Transatlantic supply chains would be heavily affected. It will be almost impossible to continue trading as we are used to in a transatlantic relationship.”
The warning comes after Trump stunned European leaders at the weekend by escalating his tariff proposal from 10%—floated in April—to a much steeper 30%. The announcement derailed what negotiators believed were near-final talks.
In response, the European Commission has dusted off a suspended €21 billion package of countermeasures and is now drafting a significantly larger €72 billion plan, which is expected to be held in reserve unless the US follows through with its threat.
Sefcovic signalled that retaliation would be inevitable.
“At that level, any additional counter-reaction from the United States has more or less the same effect. Practically, it prohibits trade,” he said.
“The EU never walks away without a genuine effort… but it takes two hands to clap.”
The draft retaliation package—dubbed a “rebalancing” mechanism—will be circulated to EU capitals for approval over the coming days, as Brussels continues negotiations with Washington.
Germany and Italy have pushed for a diplomatic resolution, with Chancellor Friedrich Merz and Prime Minister Giorgia Meloni urging that a deal be struck. France, meanwhile, has called for a tougher approach, with Trade Minister Laurent Saint-Martin demanding that the EU prepare “anti-coercion” tools targeting US services and tech firms.
“This balance of power desired by Donald Trump is a balance in which you must show your ability to fight back,” said Saint-Martin. “We need to accelerate.”
Markets across Europe responded nervously to the threat. The Dax index in Germany—home to some of the EU’s largest exporters—fell 0.4% to 24,160.64, dragged down by carmakers Volkswagen, Porsche, Mercedes-Benz, and BMW. France’s CAC 40 index also dipped 0.3% to 7,808.17.
The German Chamber of Commerce and Industry has warned that the tariffs could slash German exports to the US by €1 billion per month. Denmark’s foreign affairs minister, Lars Lokke Rasmussen, underscored the mood of preparedness:
“If you want peace, you have to prepare for war. And I think that’s where we are.”
With just weeks left until the 1 August deadline, the EU is working to find a resolution—but as rhetoric escalates on both sides, the prospect of a damaging transatlantic trade war is looking increasingly difficult to avoid.