The EU is expanding talks with partners like Canada and Japan against US tariffs

The European Union is seeking to bolster collaboration with other economies in reaction to President Donald Trump’s recent warning of new duties on its products. According to Bloomberg , EU insiders indicate plans to initiate talks with key partners including Canada and Japan, to assess ways to align their responses Earlier, Commission President Ursula von der Leyen confirmed that the moratorium on reciprocal duties would be extended until August 1, granting negotiators additional time. The planned retaliation against Trump’s steel and aluminum tariffs had been set to reactivate at midnight. “At the same time, we will continue to prepare further countermeasures so we are fully prepared,” von der Leyen told reporters in Brussels, while stressing the EU still hopes for a negotiated solution. EU plans expanded tariff package targeting $96 Billion in U.S. Goods The existing list would impose duties on roughly €21 billion ($24.5 billion) of U.S. goods, and officials say a broader package including export controls covering about €72 billion, is ready for approval by member capitals as soon as Monday. She clarified that the bloc’s ‘anti-coercion instrument,’ designed for crisis response, remains inactivated. “The ACI is created for extraordinary situations. We are not there yet,” she said. On social media, President Emmanuel Macron responded to the threat by urging EU leaders to accelerate the development of a robust response, potentially invoking the ACI should no agreement be reached by August 1. In Berlin, Chancellor Friedrich Merz warned Sunday that a 30% surcharge would deal a severe blow to exporters across Europe if no compromise materializes, saying the duties would be “to the core.” He added, “That requires two things: unity in the European Union and good lines of communication with the American president.” The president dispatched correspondence to multiple trade allies, modifying the previously suggested tariff rates from April and inviting renewed dialogue. One letter, published on Saturday, warned the EU of a looming 30% levy starting next month if superior terms are not reached. Brussels is trying to avoid steeper tariffs from the US, but the letter tempered those hopes. Nations like Mexico were similarly blindsided by comparable notifications. Insiders indicate that the bloc’s goal is to cap farm-product duties at 10% or below. Ideas for an investment-for-relief scheme, where U.S. capital infusion would translate into lower tariffs for automakers, have been set aside over fears of incentivizing offshoring. Negotiators have shifted focus to securing reduced duties on vehicles, with bilateral talks expected to resume later this week. Washington has proposed a blanket 10% surcharge on EU output, sparing mainly aerospace and medical-device sectors. In response, Brussels is insisting on relief for wine and spirits and advocating quota limits to soften the existing 50% metals levies. U.S. negotiators, in turn, have suggested a 17% tariff on agricultural products. Any provisional deal would additionally cover regulatory barriers, economic-security cooperation, and strategic procurement. Aside from the upcoming across-the-board tariffs, Trump has imposed 25% duties on vehicles and parts and escalated metals tariffs to 50%. He further plans sector-based charges on pharmaceuticals, semiconductors, and most recently, copper. Officials warn that, even under a broad agreement, separate guarantees would be required to shield the EU from these targeted measures. Euro slips as markets downplay Trump’s trade moves On Monday morning, the euro slid to a three-week trough before rebounding to $1.1679, while the peso weakened as the dollar climbed to 18.6699 MXN. Elsewhere, the pound dipped 0.07% to $1.3481 and the yen edged up 0.1% to 147.28 per dollar. The Australian dollar edged down 0.14% to $0.6565, and the New Zealand dollar fell 0.4% to $0.5984. Beyond trade, Trump remarked on Sunday that Powell’s departure would be “a great thing,” further pressuring the Fed as he calls for lower borrowing costs. Traders will look to Tuesday’s U.S. consumer-price report for June for clues on the central bank’s next moves; most foresee a slight uptick in inflation and around 50 basis points of rate cuts by year-end. Asian trade figures for June showed Chinese exports picking up and imports rebounding, as firms rushed shipments ahead of the August deadline. Yet the yuan remained subdued, trading near 7.1704 onshore and 7.1713 offshore per dollar. Investors are now focused on China’s second-quarter GDP data, due Tuesday, seeking clarity on whether growth has decelerated under ongoing trade tensions and deflationary pressures. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot