US Threatens 17% Tariff on EU Agricultural Exports Amid Trade Tensions

The ongoing trade tensions between the US and the European Union have escalated significantly. The Washington administration has issued a warning to Brussels, threatening a 17% tariff on EU agricultural exports. This move has intensified the already strained negotiations between the two economic powerhouses.

This latest development comes just as the US is preparing to implement a 20% tariff on all EU goods if a trade deal is not reached by July 9. The US is pushing for regulatory exemptions for American companies and a reduction in the EU's trade surplus with the United States. The Trump administration has made it clear that it is prepared to take strong measures if no agreement is reached.

European Commission Trade Commissioner received the warning during talks in Washington on Thursday, and the message was relayed to the ambassadors of the 27 EU member states the following day. European Commission President expressed hope for an “agreement in principle” to continue negotiations, but the US is exerting pressure to secure a binding agreement by the set deadline.

Ahead of the July 9 deadline, US officials are engaged in intense negotiations with major trading partners in Asia and Europe, aiming to secure new agreements that include significant tariff adjustments. These negotiations are part of a broader strategy to use tariffs as a key component of US foreign policy, as outlined in President Trump's America First Trade Policy memorandum. The administration has been reviewing various tariff-related measures to achieve its trade objectives.

The US has implemented a 10% baseline reciprocal tariff rate on all products from countries that import Venezuelan, Iranian, or Russian oil. This rate is subject to change based on country-specific agreements and executive orders. For most countries, except China, the country-specific rate is suspended until July 9, during which imports from those trading partners will be subject to the 10% baseline reciprocal tariff rate. China's country-specific rate is suspended until August 12, with imports from China subject to the 10% baseline reciprocal tariff rate during this period.

The US has also implemented a 25% ad valorem tariff on $30 billion worth of U.S.-origin goods from Canada, effective March 4, 2025. Additionally, a 25% ad valorem tariff on $125 billion worth of additional goods is expected to take effect on April 2. The Ontario government suspended its 25% surcharge on all electricity exports to the United States on March 11, 2025.

The US has delayed the implementation of reciprocal tariffs on various countries until July 9, including Algeria, Angola, Austria, Bangladesh, Belarus, Bosnia and Herzegovina, Botswana, Brunei, Cambodia, Cameroon, Chad, Côte d’Ivoire, Democratic Republic of Congo, Dominican Republic, Equatorial Guinea, Falkland Islands, Fiji, Guyana, India, Indonesia, Iraq, Israel, Japan, Jordan, Kazakhstan, Laos, Lesotho, Libya, Liechtenstein, Madagascar, Malaysia, Mauritius, Moldova, Mozambique, Myanmar, Namibia, Nicaragua, Nigeria, North Korea, North Macedonia, Norway, Pakistan, Philippines, Russia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Thailand, Tunisia, Turkey, United Kingdom, Venezuela, Vietnam, Zambia, and Zimbabwe.

The US has also threatened to implement tariffs on various products, including agricultural products, aluminum, automobiles, automobile parts, commercial aircraft and jet engines and parts, copper, integrated circuits, iPhones, lumber, timber, and derivative products, maritime cargo handling equipment, movies, oil and gas, pharmaceuticals, pharmaceutical ingredients, and derivative products, processed critical minerals and derivative products, semiconductors, semiconductor manufacturing equipment, and derivative products, steel, and trucks and truck parts.

The reciprocal tariffs do not apply to goods loaded onto a vessel at the port of loading and in transit on the final mode of transport before the reciprocal tariffs take effect. Additionally, articles and derivatives of steel and aluminum that are already subject to Section 232 tariffs, automobiles and automobile parts that are subject to Section 232 tariffs at the time of import, and additional articles listed in Annex II to the executive order are excluded from the reciprocal tariffs.

In response to Canada’s decision to proceed with a 3% digital services tax (DST) on technology companies, President Trump terminated the United States’ trade discussions with Canada. The United States is expected to announce a new, Canada-specific tariff rate within seven days. It is not yet clear whether that tariff will be in addition to the “fentanyl” tariffs already in place for Canadian-origin goods that do not qualify for duty-free treatment under the USMCA.