EU leaders Macron and Merz on brink of deciding EU's retaliation against US tariffs
In the final stages of intense trade negotiations, the European Union (EU) and the United States are racing against time to avoid the reimposition of high tariffs by the US, with a possible preliminary trade agreement expected before August 1, 2025 [2][3]. The US had suspended country-specific reciprocal tariffs, but this suspension is set to expire on August 1, prompting urgency in concluding the deal [2].
The potential deal could resemble the bilateral trade arrangements the US has previously made, such as the one with Japan, focusing on tariff reductions and trade facilitation [3]. However, there is still uncertainty: President Donald Trump stated there is a “50-50 chance” of reaching a trade deal with the EU, signaling some doubt about whether the negotiations will conclude successfully [3].
In response to potential tariffs, the EU has prepared retaliatory measures. It approved plans to impose tariffs on around $109 billion worth of U.S. goods if no agreement is reached, reflecting the high stakes and the scale of the dispute [4]. On the EU side, public consultations on countermeasures started earlier in 2025, contemplating additional duties on key U.S. sectors such as aircraft, automobiles, medical devices, and industrial machinery, covering €95 billion in imports [1].
The leaders, French President Emmanuel Macron and German Chancellor Friedrich Merz, have been focusing on areas such as defense, security, energy transition, artificial intelligence, and quantum technology. During their recent meeting in Berlin, they pledged a "restart in energy policy" and "equal treatment at the EU level for all low-emission energies" [5].
The EU has sought to tackle the trade tensions through talks and has drawn up detailed plans for retaliation if needed. EU Trade Commissioner Maros Sefcovic's talks with US Commerce Secretary Howard Lutnick came after Brussels said it was getting ready to pull the trigger on more than $100 billion in counter-tariffs should negotiations fail [6].
Despite the ongoing negotiations, no specific recent public comments from Macron or Merz on this issue appear in current sources. Traditionally, both leaders have expressed strong support for protecting EU economic interests and have been cautious about US trade policies [1].
Meanwhile, Paris and Berlin, along with London and Warsaw, have been pushing efforts to support Ukraine and build up the defense capabilities of NATO's European member states [7]. The leaders have also discussed a possible European response to US President Donald Trump's pledge to introduce 30-percent tariffs against the EU [8].
In May, both leaders published a joint newspaper article advocating for a "restart in energy policy" [9]. France, which relies heavily on nuclear power, has been pushing for Berlin to commit to "technology neutrality" and classify nuclear energy as climate-friendly [10]. However, there has been disagreement over a combat aircraft project involving France, Germany, and Spain [11].
US Treasury Secretary Scott Bessent said Washington is making progress on the tariff negotiations [12]. Bessent sounded an optimistic note, saying talks are going better than they had been. As the deadline approaches, both sides will be under pressure to reach an agreement that benefits both parties and avoids the imposition of tariffs.
References:
- EU prepares retaliatory tariffs against US in case of no trade deal
- US-EU trade talks face deadline as tariff suspension nears end
- Trump: US has 50-50 chance of reaching trade deal with EU
- EU approves $109 billion in tariffs against US in case of no trade deal
- Macron and Merz pledge "restart in energy policy"
- EU trade chief to meet US counterpart as tariff deadline looms
- France, Germany, UK, Poland push for Ukraine, NATO defense
- Macron, Merz discuss possible European response to US tariffs
- Macron and Merz call for "restart in energy policy"
- France pushes for nuclear energy support from Germany
- Disagreement over combat aircraft project
- US making progress on tariff negotiations, says Bessent
- The potential trade agreement between the EU and the US revolves around tariff reductions and trade facilitation, similar to their arrangement with Japan, and may also involve areas like defense, security, energy transition, artificial intelligence, and quantum technology.
- The EU is preparing retaliatory tariffs worth approximately $109 billion on US goods, should the negotiations fail, targeting sectors such as aircraft, automobiles, medical devices, and industrial machinery, covering €95 billion in imports.
- In a joint article, French President Emmanuel Macron and German Chancellor Friedrich Merz advocated for a "restart in energy policy," with France pushing for Berlin to classify nuclear energy as climate-friendly, while both leaders have shown support for protecting the EU's economic interests.
- In response to potential tariffs, the EU has been driving efforts to support Ukraine and build up the defense capabilities of NATO's European member states, while also discussing a possible European response to US President Donald Trump's tariff pledge.
- Despite ongoing trade negotiations, there is still uncertainty about reaching a deal, with U.S. Treasury Secretary Scott Bessent stating progress is being made on the tariff talks, but President Donald Trump has expressed a "50-50 chance" of a trade deal with the EU. Both sides will be under pressure to avoid the imposition of tariffs as the deadline approaches.
