When President Donald Trump imposed a sweeping 50% tariff on all imports of steel and aluminium to the US, the European Union politely noted that the move risked undermining ongoing trade talks between the two powers.
In fact, just days later, negotiations were carrying on as normal. Maroš Šefčovič, the European Commission’s chief trade negotiator, met US Trade Representative Jamieson Greer on 4 June on the sidelines of an OECD meeting in Paris. Šefčovič said talks were “advancing in the right direction at pace.” Greer commented that the meeting was “very constructive.”
The sequence of events reveals an emerging disconnect between the EU’s now-established doctrine for trade talks with the US — ‘keep the lines of communication open and don’t react to every Trump provocation’ — and the devastating reality of the tariffs that have already taken effect, even with some reprieves.
Since returning to the White House, Trump slapped 25% tariffs — now at 50% — on foreign steel and aluminium. On top of that, he hit the EU with a 20% levy on all goods, before temporarily reversing course and imposing a 10% ‘baseline’ rate on European imports. The president later doubled down, claiming that negotiations with Brussels were “going nowhere,” and warning that a new 50% baseline tariff on all EU products would kick in on 9 July if the two sides failed to reach a deal.
“The EU has settled on a negotiating strategy, which involves continuing talks with the US while preparing — and threatening — the countermeasures,” said Juliana Bouchaud, a senior analyst at the Rhodium Group, a think tank. “If the EU responded just to the steel and aluminium tariffs, that could compromise the dialogue entirely.”
The Commission’s approach marks a shift since Trump’s first term in office, when his decision in 2018 to impose global tariffs of 25% on steel and 10% on aluminium prompted a swift and robust EU response.
Now, with Trump making and withdrawing threats on almost a weekly basis, EU officials appear to have decided to ignore the noise and focus on substantive negotiations.
“The situation didn’t change fundamentally” when Trump imposed the new metals tariffs, an EU official familiar with the talks told The Parliament. While the escalation will “not make negotiations easier,” it’s unlikely to derail them, the official said.
The European sense of aplomb comes despite the existential threat the current tariffs pose to a host of European industries, chief among them steel.
“Without swift action, we will not just be underwater — we will drown,” Axel Eggert, director-general of steel advocacy group Eurofer, warned last week as the 50% rate came into effect.
Trade offerings, concessions and red lines
The EU agreed to a €21 billion batch of countermeasures on US steel and aluminium, but has yet to pull the trigger — an attempt to maintain leverage ahead of the July deadline. Meanwhile, the Commission led a month-long consultation process to determine which American products should be targeted in response to the baseline rate. That second package, which would target €95 billion worth of US goods, has yet to be finalised.
An agreement struck by the US and the UK back in May provides the EU with a blueprint for a potential deal, including what kind of exceptions the bloc can hope for. Notably, the UK was one of the few US trading partners exempt from the 50% steel-and-aluminium tariff.
And there are grounds for tepid optimism: Despite the bluster, the EU and the US appear to be now talking to each other — something that was hardly the case in the first months of Trump’s new term, when EU trade officials lamented they could not even establish contact with their American counterparts.
Following his meeting with Šefčovič last week, Greer praised the EU for having “provided the United States with a credible starting point for discussions on reciprocal trade,” adding he was “pleased” by the new pace of negotiations.
EU officials are now eyeing an upcoming NATO summit in The Hague later this month to hash out a deal. But the key question is what concessions the EU can offer to convince Trump that the US isn’t getting a bad deal.
Even before his return to the White House, the EU suggested buying more liquefied natural gas and more weapons from the US, and even lowering car levies — all considered relatively easy offerings to avert a painful trade war. Yet none of these early overtures deflected Trump’s ire; if anything, they emboldened the US to demand even more concessions, particularly on defence spending and tech regulations.
“The EU needs to put together an offer that addresses all of these elements,” said Bouchaud. She said the Commission's recent drive for competitiveness by cutting “unnecessary red tape” could be "repackaged" as concessions to the US — “whether that’s the case or not.”
But Europe’s willingness to meet US demands only extends so far: Moves like dismantling VAT, diluting food safety standards, or gutting freshly approved Big Tech regulations would cross its red lines and ultimately hurt the bloc’s own credibility.
And even in the best case, there’s a growing acceptance in Brussels that no agreement will bring back the level of free trade that the two sides had for decades.
“There’s not a realistic chance of returning to the status quo," the EU official said. “Something is here to stay.”
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