EU ready for trade talks with US and maintains emergency retaliatory package 📌

Germany’s finance minister confirmed today that the EU is “ready to retaliate” if trade talks with the U.S. fail, emphasizing that Berlin supports swift countermeasures in the absence of a fair agreement from Washington. He warned that with the deadline approaching, the EU must be prepared to implement safeguards unless the U.S. offers balanced terms—reflecting the EU’s longstanding stance on reciprocal trade treatment.

Current status of negotiations

The European Union and the United States are racing against time to reach a temporary tariff deal that would keep duties on EU exports at the current 10% level. Brussels is pushing for permanent exemptions for high-value sectors such as civilian aircraft, aerospace parts, wine, and spirits. Meanwhile, Washington is demanding reciprocal concessions—especially on cars and metals—and has proposed “compensation quotas” that would allow EU-owned plants in the U.S. to export a limited number of vehicles duty-free.

Negotiators must reach at least a framework agreement by August 1, 2025, or nearly all European goods entering the U.S. will automatically face punitive tariffs of up to 50%, triggering the EU’s already-prepared retaliatory tariff package. Officials on both sides of the Atlantic hope to finalize an outline deal this week to maintain the 10% limit while continuing work toward a full, binding agreement.

EURUSD remains elevated, as news of potential complications in U.S. trade negotiations is weakening the dollar today.