Europe has opted for a semi-armed truce in its trade dispute with the United States, stung by the collapse of a deal publicly deemed “imminent” by EU chief negotiator Maroš Šefčovič. While the “anti-coercion bazooka” long threatened as a last resort remains holstered, a second list of counter-tariffs is taking shape.
This list, diplomatically calibrated to target key US exports worth up to €72 billion, aims to exert “measured pressure” – avoiding a complete breakdown in talks while preparing for a potential ‘no deal’ outcome. Across the Atlantic, however, President Trump shows no sign of relenting, reiterating his narrative of systemic exploitation: “The United States has been robbed by friends and enemies, in trade (and the military!), for decades,” he thundered, vowing again to “do what is right for America.” A later hint at possible “dialogue” slightly softened the blow.
Šefčovič, hosting EU trade ministers in Brussels, acknowledged the widespread “regret and disappointment” among the Twenty-Seven over Trump’s stance. The ministers view the proposed 30% tariff rate as “prohibitive” for transatlantic commerce. While consensus remains on pausing the initial €21 billion retaliation, impatience with Commission President Ursula von der Leyen’s softer line is emerging. France, spearheading a harder faction alongside Austria, insists the EU response must have “no taboos,” specifically demanding Big Tech be targeted. French Minister Laurent Saint-Martin stated Trump himself altered the “balance of power,” while Austria’s Wolfgang Hattmannsdorfer added Trump’s goal “does not seem to be harmony.”
Italy and Germany, however, advocate continued caution. Italy, represented at the table by Undersecretary Maria Tripodi (while Foreign Minister Antonio Tajani visited Washington for political talks), and Germany interpret Trump’s letter as a negotiating tactic. Italian minister Francesco Lollobrigida warned from Brussels that escalating tit-for-tat tariffs risked doubly harming European companies: “This isn’t a boxing match.”
With the August 1st deadline just over two weeks away, Šefčovič assured Europe “will not leave without having made a concrete effort.” This is visible in renewed exchanges between Šefčovič and US counterparts Howard Lutnick and Jamieson Greer, though EU institutions doubt even they can sway Trump’s mood. A central question looms: what constitutes the lesser evil for Europe, given the apparent difficulty of achieving its minimum 10% tariff goal with strategic sector discounts?
European concessions, including US liquefied natural gas (LNG) and support for the US defense industry, are already on the table. Italy’s Lollobrigida further suggested increasing imports of US protein sources like soybeans. Should these offers prove insufficient, even the EU’s Danish presidency urges Europe to “show its muscles” and activate the counter-tariff machinery. Combining both proposed packages could push the European response beyond €90 billion.
Simultaneously, Europe seeks to diversify trade and reduce structural dependencies. Brussels reports “progress” with China on critical raw material restrictions ahead of a July 24th summit but continues pushing for a preferential lane. Looking further afield, Europe is also preparing to revive the CPTPP, the trans-Pacific trade pact alternative to the WTO.
Tajani Clarifies US Mission Focus**
Foreign Minister Antonio Tajani, speaking in Rome, emphasized his US trip was “primarily political,” focused on Ukraine, the Middle East, and Africa. While he would discuss trade with US officials, he firmly stated tariff negotiations are the exclusive competence of the European Union. “We are in close contact with Commissioner Šefčovič,” Tajani stated, reaffirming that trade rules result from agreements between the US and the EU bloc, not individual nations. He outlined Italy’s strategy to strengthen trade in key existing markets (Mexico, Canada, India, Japan, Gulf States, Vietnam, Indonesia) while vigorously protecting Italian pharmaceuticals, agriculture, and automotive sectors in the vital US and EU markets. Crucially, Tajani stressed the irreplaceable role of the US as Europe’s primary ally outside the bloc: “It is impossible to replace the United States… This is true for Italy and all of Europe.” He dismissed the notion of substituting the US with China, acknowledging Beijing as an interlocutor but not an ally replacement.
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