Listeners, welcome back to the European Union Tariff News and Tracker, where we break down how Washington’s trade moves are reshaping Europe’s economic landscape.
According to UBS analysis of the second Trump administration’s trade agenda, the United States now operates with an overarching 10% baseline tariff on most imports, with higher “reciprocal” rates applied to countries that run large goods trade surpluses with the US, including key European Union members. UBS reports that the effective US tariff rate across all partners has climbed above 18%, with expectations it will settle near 15% by mid‑2026, translating into a typical tariff band of roughly 10% to 15% on imports from advanced economies such as the EU.
Fair Observer describes how President Trump’s sweeping tariff package, unveiled in April 2025, marked a structural shift away from decades of trade liberalization, reviving tariff levels and uncertainty not seen since the pre‑WTO era. Maritime Fairtrade similarly notes that the average US tariff rate has surged toward Great Depression–era territory, with the European Union among those directly affected by higher duties on industrial goods and sensitive sectors.
Tensions are especially visible in metals. Coverage from the American Iron and Steel Institute highlights European pushback against US steel and aluminum measures. The European Union has warned Washington against expanding steel tariffs and has refused to trade away its tough new digital regulations in return for lower US duties on EU steel, signaling that Brussels will not barter core tech policy for relief at the border. At the same time, European officials are trying to keep the dispute from escalating into a full‑blown transatlantic trade war that could hit autos, machinery, and aviation.
UBS points out that Trump’s team is increasingly using tariffs as leverage not only on trade balances but also on broader policy issues, from security commitments to technology and regulation. For the EU, that means tariff negotiations are now entangled with debates over digital competition rules, data governance, and industrial subsidies. The pattern so far has been “escalate to negotiate”: announce high tariffs, then offer to dial them back if partners accept US conditions, including investment commitments on American soil.
For European exporters, particularly in Germany, Italy, France, and smaller manufacturing hubs, these US tariffs translate into thinner margins, potential price hikes for US customers, and complicated supply‑chain decisions about whether to shift production to the United States to avoid the new border taxes. UBS estimates that higher US tariffs are already shaving growth off export‑oriented economies and that the pass‑through into consumer prices is building, even if headline inflation data are slow to reflect it.
Looking ahead, the big questions for listeners are whether Brussels and Washington can strike EU‑wide deals that cap US tariffs in the mid‑teens, and whether a patchwork of sector‑specific compromises on steel, autos, pharmaceuticals, and digital services can prevent another round of tit‑for‑tat duties.
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