U.S. Tariffs on EU Goods To Shake Up World’s Largest Two-Way Trade Ties

The European Union (EU), America’s largest trading partner, is bracing for a potential escalation in tariffs.

The hiking of tariffs could make everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals significantly more expensive in the U.S.

The raising of tariffs on European goods could ripple through global supply chains and hit companies and consumers on both sides of the Atlantic, the Associated Press (AP) reported.

In early April, Trump imposed a 20% tariff on all EU-made products as part of a broader effort targeting nations with U.S. trade deficits.

Hours later, he suspended those duties and applied a temporary 10% rate to buy time for negotiations, with the pause set to expire July 9.

Now, displeased with the EU’s negotiating stance, Trump has threatened to hike tariffs on European exports to 50%, making everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals significantly more expensive in the U.S.

The trade ties are substantial. The EU—comprising 27 member states—is the U.S.'s largest economic partner. In 2024, transatlantic trade in goods and services was worth 1.7 trillion euros ($2 trillion), or roughly 4.6 billion euros per day, according to Eurostat.

The U.S. mainly exports crude oil, pharmaceuticals, aircraft, automobiles, and medical equipment to Europe.

The EU’s biggest exports to the U.S. include pharmaceuticals, cars, aircraft, chemicals, medical instruments, and alcoholic beverages.

Trump has repeatedly cited the EU’s 198 billion-euro ($233 billion) trade surplus in goods with the U.S. as a point of contention. However, U.S. firms hold the edge in services, particularly in cloud computing, travel, legal, and financial services.

The EU has expressed hope for a deal but warned it is prepared to retaliate with tariffs on hundreds of U.S. products—from beef and beer to auto parts and Boeing airplanes—if an agreement cannot be reached.