The European Union braces for more U.S. tariffs despite talks

The European Union is preparing for more tariffs from the United States, despite conversations with the U.S. President Donald Trump’s administration earlier this week.

It’s been an intense back-and-forth over the past few months, with Trump accusing the EU of being among the worst culprits in its trade treatment of the U.S.

Tensions have been heating in recent weeks. With its steel and aluminum subject to Washington’s broader tariffs, the EU retaliated with duties worth more than 20 billion euros on U.S. goods. These countermeasures were then put on hold for 90 days, after Trump also paused a second round of tariffs on EU goods for the same period.

“As advocated from day one, we prefer negotiations to tariffs, which are damaging to our respective economies, business operators and consumers,” Olof Gill, trade spokesperson for the European Commission, the executive arm of the EU, said in a document shared with CNBC after the meeting between White House and EU officials.

The EU’s top trade official Maros Sefcovic met U.S. Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer on April 14, but their conversations seemed to have resulted in little progress.

“It is clear that significant joint efforts will be needed to achieve a successful outcome within the 90-day window,” Gill said. “The EU is doing its part. Now, it is necessary for the US to define its position. As with every negotiation, this must be a two-way street.”

President Trump this week reiterated his view that he is not satisfied with the EU on trade.

“The European Union has taken terrible advantage, they don’t take our food products, they don’t take our cars,” he said.

The United States has further dialed up pressure on the EU this week by announcing investigations into imports of pharmaceuticals and semiconductors, which, Trump says, could lead to new levies against these sectors.

“This had been expected,” the EU’s Gill said, adding that Europeans have made “a strong case” against tariffs in these areas.

“The Commission also continues with our preparatory work on additional countermeasures, should the negotiations fail to result in a successful outcome. And everything remains on the table.”

The EU’s top exporting products into the US are medicinal and pharmaceutical goods, road vehicles, and machinery.

The EU had a trade surplus with the U.S. totaling 48 billion euros in 2023, according to data from the European Union. This can be broken into a surplus of 157 billion euros in goods and a deficit of 109 billion euros in services.

All eyes are meanwhile on Italy’s Prime Minister Georgia Meloni, who is meeting President Trump on Thursday. She’s the first European head of state to meet with the U.S. leader since some tariffs were paused earlier this month.

“This represents a key opportunity for her to demonstrate both her closeness to President Donald Trump and her potential role as a credible interlocutor capable of revitalizing transatlantic dialogue,” Wolfango Piccoli, co-president of consultancy firm Teneo, said in a note to clients last week.

He added that Meloni “is under pressure to protect Italy’s exports, which recorded a trade surplus of 40 billion euros with the U.S. in 2024, the third highest in the EU, following Germany and Ireland.”

Trump has previously called Meloni “a wonderful woman” and said that Rome has a “very strong leadership with Georgia.”

Meloni and Trump share conservative political ideas and also similar views over China. The talks could still take a turn, however, as Trump might push Meloni on the question of Rome’s defense spending as part of its commitments to the NATO alliance. Rome is not yet complying with the coalition’s target of investing 2% of its GDP on security.