Originally slated to take effect on 1 June, 2025, the implementation date has now been pushed to 9 July following a direct phone call with European Commission President Ursula von der Leyen.
Trump stated the delay was intended to "allow time for negotiations" with EU leaders, who have expressed serious concerns about the impact of such sweeping measures on transatlantic trade.
The proposed tariff, aimed at closing what Trump claims is a “massive” trade deficit with the EU, has drawn widespread criticism from both economists and business leaders, who warn it could disrupt supply chains and increase costs for US businesses reliant on European imports.
Despite Trump's claim of a $250m trade imbalance, the actual US goods trade deficit with the EU stands closer to $240bn. The proposed tariffs would target a wide range of goods, including German-made vehicles, pharmaceuticals, and machinery—industries with deep ties to US buyers and manufacturers.
In response, the EU has indicated a willingness to enter into formal negotiations and has offered a “zero-for-zero” tariff proposal for industrial goods. However, the bloc is also preparing for the possibility that talks may fail.
A retaliatory package, reportedly worth up to €100bn, has been drafted. It includes potential duties on US exports ranging from medical devices and agricultural products to passenger vehicles and chemicals.
Financial analysts warn that if negotiations collapse, the resulting tariff war could ripple across global markets, particularly in sectors such as automotive manufacturing, consumer goods, and high-tech equipment. The German Finance Ministry has emphasised the urgency of reaching a diplomatic resolution, noting that prolonged uncertainty would hurt both economies.
As 9 July approaches, businesses with EU trade exposure are being urged to model contingency scenarios and revisit supply-chain strategies. For multinational corporations and SME exporters alike, the next six weeks will be crucial in determining whether diplomacy prevails—or whether the global economy is set for another round of tit-for-tat trade battles.
For now, all eyes remain on Washington and Brussels as negotiations intensify, with stakeholders hoping the temporary reprieve leads to a more stable and mutually beneficial trade framework.
Danilo Acquisto 13 hours
Sandra Sithole, Rethabile Shabalala and Kimara Rampersad 8 hours
