Germany's Bund futures turn lower after FT reports US and EU close in on tariff deal, last down 0.6%

Germany's Bund futures turn lower after FT reports US and EU close in on tariff deal, last down 0.6%

The European Union is preparing to impose 30% tariffs on approximately $117 billion worth of US goods if no deal is reached and if US President Donald Trump follows through on his threat to place that rate on most EU exports after August 1, according to a report from Bloomberg [3]. As part of an initial wave of countermeasures, the EU will combine an already approved list of tariffs on $21 billion of US goods with a previously proposed list covering an additional $72 billion of American products into a single package [1]. This move comes as EU member states, including Germany, have hardened their positions in response to the US stiffening its negotiating stance [1].

The targeted US exports include industrial goods such as Boeing aircraft, US-made cars, and bourbon whiskey. These items would face a levy matching Trump’s threatened 30% tariff [1]. The EU tariffs would be ready to take effect next month but would only be implemented if no agreement is reached and the US proceeds with its levies after the August deadline [1].

Germany supports the EU readying countermeasures, with a government representative stating that Berlin would reportedly support activating the EU’s anti-coercion instrument (ACI) if no deal materializes [1]. The ACI is the bloc’s most potent trade tool and is primarily designed as a deterrent [1]. It would enable the EU to launch a broad range of retaliatory actions, including new taxes on US tech giants, targeted curbs on US investments, and limiting access to the EU market [1].

The European Commission plans to submit counter-tariffs on $93 billion of US goods for approval to EU members, while its trade chief will hold talks with US Commerce Secretary Howard Lutnick [2]. The Commission’s primary focus is to achieve a negotiated outcome with the United States to avert 30% U.S. tariffs that Trump has said he will impose on the 27-nation bloc on August 1 [2].

The EU is also buoyed by the initial deal struck between the United States and Japan, which includes a 15% baseline rate for cars [2]. This deal could serve as a template for the EU’s negotiations with the US, with the same rate potentially applying to EU auto exports.

The German government representative noted that U.S.-Japan relations are not comparable to those between the EU and the United States [2]. However, the Japan deal could provide a benchmark for the EU’s negotiating objectives.

The EU is approaching the decisive phase in the tariff dispute with the USA, with the goal of achieving a fair, reliable agreement with low tariffs [1]. Without such an agreement, the bloc risks economic uncertainty at a time when stability is crucial.

References:
[1] https://www.businesstimes.com.sg/international/global/eu-readies-100-billion-euro-no-deal-plan-match-us-30-tariff
[2] https://www.reuters.com/business/eu-advance-retaliation-us-goods-tariff-hike-looms-2025-07-23/
[3] https://www.investing.com/news/stock-market-news/eu-said-to-plan-30-tariffs-on-117-billion-of-us-goods-if-trump-imposes-levies-4147888