EU delays retaliatory tariffs on US goods, aims for deal by August 1

The European Union has decided to postpone retaliatory tariffs on US goods that were set to begin Monday, expressing hope that a trade agreement can be reached with the Trump administration before the new tariffs take effect on August 1.

"This is now the time for negotiations," European Commission President Ursula von der Leyen said Sunday in Brussels, following a letter from US President Donald Trump announcing a 30% tariff on imports from the EU and Mexico beginning August 1.

The EU, the largest trading bloc and America's top trading partner, had planned to introduce its own countermeasures starting Monday at midnight Brussels time. However, von der Leyen said the EU will delay those measures until August 1, citing Trump's letter as a sign that both sides have until then to reach an agreement.

Europe's key exports to the US include cars, pharmaceuticals, aircraft, chemicals, medical equipment, and wine and spirits.

"We have always been clear that we prefer a negotiated solution," von der Leyen said. "But if an agreement cannot be reached, we will continue preparing our countermeasures so we're fully ready."

Italian Prime Minister Giorgia Meloni warned that a trade war would weaken both sides at a time of shared global challenges. "Europe has the economic and financial strength to argue for a fair and sensible agreement," her office said in a statement, adding that Italy would work actively toward a deal.

Italian Foreign Minister Antonio Tajani is scheduled to travel to Washington on Monday for talks with US officials and lawmakers. Meloni's right-wing government — the only EU administration represented at Trump's inauguration — has positioned itself as a mediator between Brussels and Washington.

President Trump has repeatedly claimed that past trade deals have disadvantaged the US economy and argues that his tariff policy will help restore fairness. In his letter to the EU, he labeled the American trade deficit a national security concern.

White House National Economic Council Director Kevin Hassett told ABC News on Sunday that Trump was not satisfied with the current draft trade proposals. "He's seen some sketches of deals negotiated with Howard Lutnick and others on the trade team, and he thinks they're not good enough," Hassett said. "Sending these letters was his way of drawing a line in the sand. We'll see how things develop."

Trump's tariff threats have caused prolonged uncertainty for US trade partners and businesses worldwide — from French wine producers to German carmakers — with deadlines frequently shifting.

According to Eurostat, trade in goods and services between the EU and the US reached €1.7 trillion ($2 trillion) in 2024, averaging €4.6 billion daily.

EU trade ministers are set to meet Monday to assess trade relations with both the US and China. The ongoing friction with Washington has prompted the EU to consider deepening ties with China.

Speaking alongside Indonesian President Prabowo Subianto, von der Leyen emphasized the need for diversified and trustworthy trade partnerships. Announcing closer cooperation between the EU and Indonesia, she said current tensions highlight the importance of building predictable economic relationships.

President Prabowo echoed the sentiment, noting that while the US remains a global leader, "we would like to see a very strong Europe" and advocate for multilateral engagement.