① The EU Trade Commissioner warned that such a high tax rate would lead to almost total disappearance of trade between both parties, resulting in a huge negative impact on both economies; ③ The European Central Bank may maintain interest rates at the meeting on July 24 due to economic uncertainty and inflationary pressures, but retains the possibility of further rate cuts.

On July 14, the Financial Association News reported (Editor: Niu Zhanlin) that the U.S. government threatened to impose a 30% tariff on the EU, which could further dampen the already weak eurozone economy and prompt the European Central Bank to cut rates again.

Last Saturday, Trump announced that starting August 1, 2025, the U.S. would impose a 30% tariff on products imported from the EU. He stated that if the EU is willing to open its trade market to the United States, remove tariffs, non-tariff policies and other trade barriers, the U.S. might consider adjusting its tariff policy accordingly.

By Monday, EU Trade Commissioner Šefčovič responded, stating that if the U.S. really imposes a 30% tariff, then goods trade between the EU and the U.S. could almost completely disappear; such a high tax rate would essentially amount to a ban on trade between the two sides.

He added, “If tariffs are 30% or higher, trade as we currently conduct it cannot continue, which would have a huge negative impact on both the EU and the U.S. I will do everything in my power to prevent this situation from occurring.”

According to data from the European Council, last year the total bilateral trade in goods and services between the EU and the U.S. was 1.68 trillion euros (about 1.96 trillion USD). However, Trump has consistently criticized the EU, arguing that its trade policies are unfair to the United States.

Berenberg Bank economist Salomon Fiedler commented that Trump has repeatedly stated extreme initial positions as a negotiation tool, allowing for compromise later when closer to his goals.

In June of this year, European Central Bank economists mentioned a scenario in which the U.S. imposes a 20% tariff on goods imported from the EU, with the EU retaliating in kind; under such circumstances, the eurozone economic growth rates would be 0.5% and 0.7% for this year and next year, respectively.

It is crucial that economists at the European Central Bank estimate that the price increases resulting from the EU’s tariff hikes will be completely offset by the weakening demand caused by the U.S. tariff increases.

As a result, economists expect the average inflation rate in the eurozone to be 1.5% in 2026 and 1.8% in 2027. This is a clear signal that policymakers need to lower borrowing costs to prevent inflation from falling below the 2% target.

Economists at Barclays wrote in a report to clients: “To prevent inflation from temporarily falling below the 2% target and becoming more persistent, deposit rates may drop to 1%, or even lower.”

After implementing eight rate cuts since June 2024, the European Central Bank may keep rates unchanged at the meeting on July 24th. In the meeting at the beginning of June, the ECB hinted that this process is nearing its end, while the market expects at least one more rate cut from the central bank this year.

ECB board member Joachim Nagel stated last week that in light of rising economic uncertainty, the European Central Bank must keep all options open, neither committing to nor ruling out further rate cuts.

The trade situation between the EU and the U.S. may become clearer in September, and if tariffs are as high as Trump threatened, a ninth rate cut is very likely.