Sander Tordoir
Chief economist at the Center for European Reform
If the EU wanted a shot at pushing tariffs below 10 percent, it would have had to retaliate forcefully alongside China after Liberation Day, on April 2, 2025. But a 10 percent tariff is manageable for EU exports and was priced in by Wall Street. The real threat lies in much higher sectoral tariffs: on semiconductors, autos, and pharmaceuticals.
The UK accepted the 10 percent tariff and secured exemptions. But the UK is an industrial dwarf: U.S. President Donald Trump is unlikely to offer the same to the EU, which exports far more to the United States.
Trump responds to strength. To lower sectoral tariffs meaningfully, the EU will need to retaliate in-sector or hit U.S. services via the anti-coercion instrument to raise the domestic political costs in the United States. So, Europe should strike back—though too few EU member states seem to have the stomach for it. Joint retaliation with Japan or South Korea would help, but they too fear Washington might pull security guarantees.
Trump wants tariffs on the EU—and he will probably get them. Divide et impera. What makes it worse: Unlike Asia’s heavyweights, the EU may be the only bloc delivering the macroeconomic rebalancing the United States has demanded. The bittersweet result: Europe will suck in more Chinese imports, to the detriment of EU industry.
Elvire Fabry
Senior research fellow in Geopolitics of trade at the Jacques Delors Institute
Trump’s big win is how quickly he got the world used to the new reality of a universal 10 percent tariff. The absence of an international coalition prepared to retaliate is a real failure. But Trump’s asymmetric protectionism aiming at limiting access to the U.S. market while gaining more access to other markets also failed, aside from Vietnam and a beef quota in the UK.
For Europeans, prioritizing a 10 percent baseline with mere arrangements regarding Section 232 tariffs on steel and aluminum would be a mistake. The recent threat of a 200 percent tariff on pharmaceuticals is a reminder that it would not deter Trump from coming back “tarifficly” on EU digital regulations, sanitary and phytosanitary standards, the value added tax, and digital taxes.
Rather than engaging in a resilient strategy based on a calibrated retaliation, a short-term European surrender would be shortsighted and act as a slow poison. It would encourage the mindset that prioritizes national interests and firefighter tactics for critical sectors, while leaving European citizens disillusioned with the EU’s ability to serve as a protective shield.
With an ongoing structural shift in the United States, there will be no return to trade as usual. While remaining open, Europeans must accelerate the integration of the EU’s single market and engage in the coordination of an industrial policy.
Erik Jones
Nonresident scholar at Carnegie Europe
The EU faces a stark choice between accepting a handshake deal that is not really a trade agreement and pushing back. The deal is complicated by the humiliating nature of the negotiations, and the serious concerns of EU member states that their interests have not been adequately represented in this process, such as it is.
Stroking the U.S. President’s ego is unpleasant business. Wasting time in conflict as theater—which is what Trump seems to enjoy—is worse. The strategy is—and should be—to push the conversation down to a level where diplomats can engage in real negotiations, to come up with a written trade agreement that both sides—including the U.S. Senate—are able to accept. That agreement will inevitably define the 10 percent tariff that the U.S. President is demanding, including all the carve-outs necessary.
Those negotiations will take more time than the current ultimatum allows, but those deadlines tend to move in important ways to accommodate the process and to make space for the more theatrical elements.
If the alternative to engaging in the process is to ignite a conflict that serves no-one’s interests apart from Trump’s desire to appear strong, then accepting the deal currently on offer makes sense.
Georgina Wright
Senior fellow at the German Marshall Fund of the United States
I don’t think the EU has a choice. From the start, the Trump administration made it clear that it was unlikely to go below the 10 percent tariff baseline. For the EU, this has always been a damage-limitation exercise aimed at protecting key export sectors. Even if a deal is reached, negotiations will likely continue. The Trump administration has already indicated it may impose new Section 232 tariffs on pharmaceuticals, semiconductors, and derivatives—major European exports to the United States, and there is no assurance the EU will secure tariff relief for these sectors.
The terms of negotiation keep shifting. Rather than exempt the EU as a whole, Washington may choose to grant tariff relief selectively to individual companies, especially those willing to move production or investment to the United States. In this context, any outcome with tariffs lower than the 50 percent initially threatened by Trump should be viewed as a success. The crucial question now is how the EU respond to it in the future: Can it react swiftly to new tariff announcements, cushion the impact, preserve single market unity, and continue diversifying its export markets? That’s what the European Commission will be judged on, not whether it has resisted the 10 percent.
Rem Korteweg
Senior research fellow at the Clingendael Institute
No, the EU should continue to pursue a comprehensive deal with the United States though this will not be easy. In the meantime, an interim accord is desirable but not guaranteed.
For the EU, cutting its losses would produce some short-term certainty at the expense of undermining the union’s longer-term negotiating position. Short-term deals have a tendency to produce loose ends and the implementation of agreements that have been struck since April 2 remains weak.
In Trump’s world, no deal is ever permanent. What he celebrates as an agreement today, he bargains about tomorrow. Just ask Canada and Mexico.
If the previous months are any indication, it should be expected that—whether there is a deal or not—President Trump will continue to exert pressure on the EU, European governments and firms while wielding the tariff instrument.
The EU should continue in a calm and determined way, and stand ready to deploy possible retaliatory measures, while remaining open to talks. Instead of letting Trump determine events, Brussels should put more energy into concluding trade agreements with other countries and blocs, building coalitions, and rigorously pursuing a deeper European internal market. This, more than any deal with Trump, will boost resilience and strengthen multilateral trade.
Steve Hanke
Professor of applied economics at the Johns Hopkins University
It’s difficult to keep up with President Trump’s tariff threats. While Trump zigs and zags, he remains a dyed-in-the-wool protectionist. If that isn’t bad enough, he also practices anomie. In short, Trump does not respect and follow the laws or norms of sovereign interaction and discourse.
With the stage set in such a way, what should the EU do? It should call Trump’s bluff. The U.S. president has stated that his tariff threats are nothing more than a means to reduce tariffs to zero. The EU should say: Fine, zero they will be.
Sinan Ülgen
Senior fellow at Carnegie Europe
By all means yes. But I don’t think that’s on the table. The U.S. ask is much broader and includes changes in EU digital regulation and taxation policy.
If there is no deal, the snapback tariff is likely to be 20 percent. So if a deal can be made limiting the additional tariff to 10 percent, that is not a necessarily bad outcome.
These additional tariffs will not significantly undermine the EU’s competitive position in relative terms. Many other exporting countries will face higher tariffs. EU exporters will not be in a competitive disadvantage compared to the exports to the U.S. market from the rest of the world. There will nonetheless be a few exceptions like Mexico and possibly the UK that stand to gain a competitive edge with their lower additional tariffs. But from the EU’s perspective, the sustainability of this deal is as important as the tariff level.
For trade, supply chains, and investments, predictability matters as much as the ultimate production cost. So EU policymakers should at least seek to guarantee, to the extent possible with a Trump-led America, that the agreed conditions are there to last.
