The tariff hike that Donald Trump announced by letter to the EU — and to Mexico — last Saturday is the latest evidence that a negotiated end to the trade war with the United States, “beneficial to both sides” and eagerly sought by Brussels, will be very difficult to achieve.

The European Commission, at least on paper, still places its faith in negotiations to avoid “disruption” in transatlantic trade. But in its rhetoric, the response is gaining strength: “defending European interests,” “being ready for all scenarios.” These ideas will be very present at the meeting of EU foreign and trade ministers this Monday in Brussels. First, the European Commission must clarify how real it sees the chances for an agreement, but it can no longer sidestep the reality of preparing for a trade war.

On Saturday, when reacting to Trump’s announcement that he will impose 30% tariffs on EU exports to the United States, French President Emmanuel Macron was very explicit in posts on the social network X, in both French and English. He supported the Commission while pressuring it: “It is more than ever up to the Commission to assert the Union’s determination to resolutely defend European interests. In particular, this implies speeding up the preparation of credible countermeasures, by mobilizing all the instruments at its disposal, including anti-coercion, if no agreement is reached by August 1st.”

August 1 is now the date to watch, the new deadline unilaterally set by Trump and once again accepted by Brussels in its eagerness to negotiate and avoid provocations — even though these provocations have already arrived in the form of a letter delivered directly to Berlaymont, the headquarters of the Commission in the EU capital.

The president of the Commission, Ursula von der Leyen, implicitly acknowledged this on Sunday by delaying any response until early August. For now, she has spoken generically about “being ready for all scenarios” and maintained a measured tone before considering stronger measures in the trade war: “The ACI [Anti-Coercion Instrument] is created for extraordinary situations — we are not there yet.”

German Chancellor Friedrich Merz has also adopted a similarly conciliatory stance. He supports responding only if absolutely necessary, but not before August 1. “I discussed this intensively over the weekend with both Macron and Ursula von der Leyen,” he said Sunday on the public broadcaster ARD. “We want to use this time now, the two and half weeks until August 1 to find a solution.”

Growing pessimism

Diplomatic sources said on Sunday that, beyond all the noise heard these days — which has grown louder since Saturday — the European Commission’s first task this Monday, when meeting again with ministers, will be to determine whether there are any real chances of reaching an agreement after several months of negotiations.

The intense contacts in recent weeks, including a call between Trump and Von der Leyen, had led Brussels to believe a deal might be possible soon. However, as the week progressed, there was growing pessimism. The key question now is whether the EU executive thinks the goal of Saturday’s letter is to increase pressure to secure more concessions, or to create an almost insurmountable obstacle that pushes any peaceful solution further away.

Von der Leyen’s announcement suggests she sees possibilities for a deal. This Tuesday, the suspension on imposing tariffs on a list of U.S. products worth about €20 billion ($23 billion) — measures triggered by Trump’s 25% tariff increase in March on steel and aluminum, which are already in effect — was set to expire. This suspension will now be extended until early next month.

The issue will undoubtedly be addressed at the EU Trade Council. As seen on Sunday afternoon during the preparatory meeting of ambassadors, there was support for the Commission to keep a cool head and fight for an agreement until the very end, according to sources familiar with the meeting. They also noted encouragement for the Commission to step up preparations to have responses ready in case negotiations fail. At this stage, the next chapter is the additional list of U.S. imports to be sanctioned: originally around €90 billion ($105 billion), but reduced after public consultation.

What remains to be seen now is whether, as happened with the first retaliation, approval will be granted in the coming weeks before August 1, thus preparing a tariff response that could approach €100 billion ($116 billion) between both measures. This amount would, in principle, be significantly below the value of U.S. imports from the EU, which Washington is already taxing at higher rates — 25% on cars and automotive parts, 50% on steel and aluminum, and a general 10% under the so-called “reciprocal tariffs.”

According to the Commission’s calculations, all these protectionist measures affect about €360 billion ($420 billion), or 70% of European exports to the United States. Brussels argues that the aim is more to “rebalance” through the response than mere “retaliation,” which would mean an identical reciprocal measure. Moreover, such parity wouldn’t be possible anyway, since the EU imports only €350 billion ($408 billion) worth of U.S. goods according to 2024 figures, and there is also a significant risk of self-harm by targeting products that cannot easily be replaced.

In this context, the option Macron referred to on Saturday comes into play: the Anti-Coercion Instrument, which would allow a broader range of trade responses more quickly than traditional routes. The question is whether all member states would be willing to go that far. France certainly would. Germany, however, is more uncertain.

Part of the French president’s position is supported by experts in negotiation and international trade, such as Ignacio García-Bercero, a researcher at the Brussels-based think tank Bruegel. This former chief negotiator for the Commission with the U.S. during Trump’s first term even proposed further details after reviewing the letter’s contents. He argues that “the only response” involves “first applying 30% tariffs on both retaliation packages; second, authorizing an increase in tariffs up to 60% if the U.S. escalates; and third, activating the Anti-Coercion Instrument so that the Commission can start consultations to impose reprisals on services and public procurement.”

Such a scenario would almost certainly result in a more overt trade war than now, with ongoing tit-for-tat responses. This is precisely the outcome Berlin wants to avoid at all costs. “That would overshadow everything, and hit the German export industry to the core,” said Merz.

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