EU Talks Going Nowhere

NBC reports Trump says talks with E.U. are ‘going nowhere,’ threatens 50% tariff in June

In a post on his Truth Social platform, Trump wrote that he was “recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.” That rate would be higher than the 39% Trump promised to hit the bloc with on April 2’s so-called Liberation Day.

Just minutes earlier, Trump had also threatened Apple with a 25% tariff if it does not start producing iPhones in the United States — an outcome industry experts broadly see as a nonstarter. “The concept of Apple producing iPhones in the U.S. is a fairy tale,” prominent tech analyst Dan Ives said in response to Trump’s threat Friday.

Trump has repeatedly assailed the European Union, calling it “in many ways, nastier than China.” On tariff rates and what the U.S. calls “non-tariff barriers,” Trump has said, “They’ll come down a lot. You watch.” But the bloc has refused to alter its value-added tax, a frequent point of contention for Commerce Secretary Howard Lutnick and other U.S. officials.

Speaking on CNBC shortly after Trump’s social media posts, Chicago Federal Reserve President Austan Goolsbee noted, “10% was going to be the highest tariff rate that we had on the world in 90 years. To go to 50% is a completely different order of magnitude.”

The E.U. bloc is America’s second-biggest trading partner behind China. The United States exported more than $350 billion of goods to the 27-nation bloc in recent years and imported $550 billion worth of goods. [False – the EU is first and China is fourth! NBC’s Steve Kopack confuses trade deficits with overall trade]

Trading Partners Imports and Exports

(Click on image to enlarge)

Trade Balance data from the Census Department, chart by Mish

US Balance of Trade – Goods Only 10 Select Countries Plus EU

(Click on image to enlarge)

Trade Balance data from the Census Department, chart by Mish

Putting 50 percent tariffs on your largest trading partner is downright stupid.

And please look at Canada. For all of Trump’s bluster, the US goods trade deficit with Canada is a mere $64 billion.

If one factors in services, the US barely has a trade deficit with Canada.

Nontrade Barriers and the VAT

Trump claims the EU’s VAT discriminates against the US. Once again, Trump is economically illiterate. I will discuss VATs in a separate post.

There are other genuine non-tariff barriers, especially with China, and those are a legitimate concern.

But the bottom line is Trump’s vision of “Reciprocal Tariffs” is nonsense because it relies heavily on seriously wrong VAT theory.

Good Proposals Coming In

The Hill quotes Bessent Countries bringing ‘good proposals’ with ‘a few exceptions’

“I can tell you that, with a few exceptions, the countries are coming with very good proposals for us,” Bessent told CNN’s Jake Tapper. “They want to lower their tariffs; they want to lower their nontariff barriers.”

If they are good proposals, with few exceptions, then take them and name them.

No one believes these lies.

Comment of the Day

One of my readers who posts under the name “PreCambrian” made this astute observation.

Trump couldn’t legislate his agenda because by the time they even typed the bill for a vote he would have changed his mind.

About all he can do is threaten companies and people. Of course now he also has the various departments of the government threaten and/or restrict any person, company, or institution that he doesn’t like such as cancelling Harvard’s ability to enroll foreign students.

Next it will be the ability of some company to obtain or renew H1B visas.

Related Posts

April 25, 2025: Trump Tells Time Magazine He Has Made 200 Deals Already, Refused to Name Any

Check out this incredible interview with Time.

May 20, 2025: Hoot of the Day: Trump Threatens a Return to Reciprocal Tariffs

We’ve gone from 200 deals “100%” to threats of returning to reciprocal tariffs if countries don’t deal.

The fact is Mexico is the largest US trading partner as an individual nation. If we include the EU as a bloc, it is number 1, Mexico is number 2, Canada is number 3, and China is number 4.

For discussion of trading partners, please see Fact Check on Trump’s Claim “We Don’t Do Much Business with Canada”

“We don’t do much business with Canada from our standpoint, they do a lot of business with us.”

Also see 90 Trade Deals in 90 Days, a Midpoint Update, Where Are We?

How is the administration’s call to do 90 deals in 90 days going?

Trump gave countries a 90 day reprieve. How long is 90 days?

Obvious from the Beginning: The EU is never going to give up its VAT so EU talks were always doomed from the start on this reciprocal nonsense.

Progress was always imaginary.

More By This Author: