US-EU trade war fears reignite as Europe strikes back at Trump’s threat
Fears of a US-EU trade war have been reignited after Europe refused to back down in the face of fresh threats from Donald Trump.
The word tariff has dominated much of the US president’s second term, and he has repeatedly and freely threatened countries with them.
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This included the so-called “liberation day” last month, where he unleashed tariffs on many of his trade partners.
On Friday, after a period of relative calm which has included striking a deal with the UK, he threatened to impose a 50% tariff on the EU after claiming trade talks with Brussels were “going nowhere”.
The US president has repeatedly taken issue with the EU, going as far as to claim it was created to rip the US off.
However, in the face of the latest hostile rhetoric from Mr Trump’s social media account, the European Commission – which oversees trade for the 27-country bloc – has refused to back down.
EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.
“We stand ready to defend our interests.”
Donald Trump speaks to reporters in the Oval Office on Friday
Fellow EU leaders and ministers have also held the line after Mr Trump’s comments.
Polish deputy economy minister Michal Baranowski said the tariffs appeared to be a negotiating ploy, with Dutch deputy prime minister Dick Schoof said tariffs “can go up and down”.
French trade minister Laurent Saint-Martin said the latest threats did nothing to help trade talks.
He stressed “de-escalation” was one of the EU’s main aims but warned: “We are ready to respond.”
Mr Sefcovic spoke with US trade representative Jamieson Greer and commerce secretary Howard Lutnick after Mr Trump’s comments.
Mr Trump has previously backed down on a tit-for-tat trade war with China, which saw tariffs soar above 100%.
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Sticking points
Talks between the US and EU have stumbled.
In the past week, Washington sent a list of demands to Brussels – including adopting US food safety standards and removing national digital services taxes, people familiar with the talks told Reuters news agency.
In response, the EU reportedly offered a mutually beneficial deal that could include the bloc potentially buying more liquefied natural gas and soybeans from the US, as well as cooperation on issues such as steel overcapacity, which both sides blame on China.
Stocks tumble as Trump grumbles
Major stock indices tumbled after Mr Trump’s comments, which came as he also threatened to slap US tech giant Apple with a 25% tariff.
The president is adamant that he wants the company’s iPhones to be built in America.
The vast majority of its phones are made in China, and the company has also shifted some production to India.
Shares of Apple ended 3% lower and the dollar sank 1% versus the Japanese yen and the euro rose 0.8% against the dollar.
Elon Musk has stepped up his attacks on Donald Trump’s sweeping tax and spending bill – weeks after a spectacular fallout between the world’s richest man and the US president.
Following weeks of relative silence after clashing with Mr Trump over his “big beautiful bill”, the billionaire vowed to unseat politicians who support it.
In a post on X, Musk said those who had campaigned on cutting spending but then backed the bill “should hang their heads in shame”.
He added: “And they will lose their primary next year if it is the last thing I do on this Earth.”
Musk also threatened to put their faces on a poster which said “liar” and “voted to increase America’s debt” by $5trn (£3.6trn).
The posts attracted a swift reply from Mr Trump, who claimed the billionaire “may get more subsidy than any human being in history” for his electric car business.
“Without subsidies, Elon would probably have to close up shop and head back home to South Africa,” he wrote on Truth Social.
“No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!”
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Elon’s dad on the Musk-Trump bust-up
Musk spent at least $250m (£182m) supporting Mr Trump in his presidential campaign and then led the newly formed Department of Government Efficiency (DOGE), which sacked about 120,000 federal employees.
He has argued the legislation would greatly increase the US national debt and wipe out the savings he claimed he achieved through DOGE.
As the Senate discussed the package, Musk called it “utterly insane and destructive”.
The Tesla and SpaceX CEO said the bill’s massive spending indicated “we live in a one-party country – the PORKY PIG PARTY!!”
“Time for a new political party that actually cares about the people,” he wrote.
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Musk previously said some of his social media posts during his dramatic fallout with Mr Trump “went too far”.
He had shared a series of posts on X, including one that described Mr Trump’s tax and spending bill as a “disgusting abomination”.
He also claimed, in a since-deleted post, that the president appeared in files relating to the disgraced paedophile financier Jeffrey Epstein.
But Musk later wrote: “I regret some of my posts about President @realDonaldTrump last week. They went too far.”
In response, the president told the New York Post: “I thought it was very nice that he did that.”
Israeli Prime Minister Benjamin Netanyahu will be meeting Donald Trump next Monday, according to US officials.
The visit on 7 July comes after Mr Trump suggested it was possible a ceasefire in Gaza could be reached within a week.
On Sunday, he wrote on social media: “MAKE THE DEAL IN GAZA. GET THE HOSTAGES BACK!!!”
At least 60 people killed across Gaza on Monday, in what turned out to be some of the heaviest attacks in weeks.
Benjamin Netanyahu, left, with Donald Trump during a previous meeting. Pic: Reuters
According to the Hamas-run health ministry, 56,500 people have been killed in the 20-month war.
The visit by Mr Netanyahu to Washington has not been formally announced and the officials who said it would be going ahead spoke on condition of anonymity.
An Israeli official in Washington also confirmed the meeting next Monday.
White House Press Secretary Karoline Leavitt said the administration was in constant communication with the Israeli government.
She said Mr Trump viewed ending the war in Gaza and returning remaining hostages held by Hamas as a top priority.
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The war in Gaza broke out in retaliation for Hamas’ 7 October 2023 attacks on southern Israel that killed 1,200 people and saw a further 250 taken hostage.
An eight-week ceasefire was reached in the final days of Joe Biden’s US presidency, but Israel resumed the war in March after trying to get Hamas to accept new terms on next steps.
Talks between Israel and Hamas have stalled over whether the war should end as part of any ceasefire.
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