President Donald Trump has issued a threat to impose a 17% tariff on food imports from the European Union, escalating trade tensions between the two economies.
The warning comes as a July 9 deadline approaches for both sides to reach a new trade agreement.
If no deal is reached by that date, Trump has also warned that all EU goods entering the U.S. could be subject to a 50 percent tax.
EU officials described the proposed food tariff as a significant escalation in ongoing negotiations.
It remains unclear whether the proposed 17% tariff on food exports would be in addition to the potential 50 percent tariffs or would replace them.
Last year, the EU exported nearly $58 billion in food and farm products to the United States, including wine and specialty items, as the Daily Mail reported.
Failure to finalize an agreement may result in U.S. tariffs on a broad range of EU goods, which could prompt the European bloc to retaliate. EU countermeasures would likely target American exports such as food products and technology components.
The United States and European Union share one of the largest trade relationships globally, representing around 30 percent of international trade in goods. The U.S. exports crude oil, aircraft, and pharmaceuticals to the EU, while Europe exports machinery, cars, chemicals, and food items to America.
In 2024, total trade between the two partners reached approximately 1.68 trillion euros, or $1.98 trillion. The EU reported a trade surplus of 198 billion euros in goods, and a 148 billion euro deficit in services, resulting in an overall surplus of around 50 billion euros.
President Trump has long criticized the EU’s trade practices, accusing the bloc of exploiting the United States. He has often claimed that the European Union was created to disadvantage American interests.
Negotiators are reportedly working on a five-page draft agreement that would outline a basic framework, though only a small portion of the text has been agreed upon. Talks have been characterized as difficult and slow-moving.
European Commission President Ursula von der Leyen stated on Thursday that negotiators are aiming for an “agreement in principle” but acknowledged that reaching a detailed final deal within the current 90-day reprieve is unlikely.
Von der Leyen warned that if no resolution is achieved, all options remain available for the EU, implying potential retaliation through trade policy tools. Treasury Secretary Scott Bessent appeared unsure about whether an agreement could be reached before the deadline.
“We’ll see what we can do with the European Union,” Bessent said in an interview with CNBC on Thursday. Talks are expected to continue through the weekend as both sides seek a breakthrough.
EU negotiators are reportedly willing to keep a 10 percent baseline tariff on most goods in return for sector-specific exemptions. These exemptions would apply to critical industries such as pharmaceuticals, aerospace, semiconductors, and alcohol.
Internal divisions within the EU are complicating negotiations. Some of the 27 member nations are open to temporary higher tariffs for trade certainty, while others are pushing for a tough stance to force Trump into concessions.
Germany’s Chancellor Friedrich Merz has urged the European Commission to strike a swift deal. Germany seeks exemptions from a 25 percent tariff on vehicles and a 50 percent tariff on steel, sectors vital to its economy.
France, led by President Emmanuel Macron, is pushing for full reciprocity in any agreement, indicating a harder line that could delay consensus within the EU.
Play nice or the Islamic EU will get nasty!