Trump demands EU cut 30% tariff for trade deal as EU threatens $109B retaliation, 50-50 odds

President Donald Trump has reiterated that the European Union must reduce its 30% tariff on U.S. goods to secure a trade agreement, a condition he described as a “buy down” requirement. Speaking ahead of a trip to Scotland, Trump stated the likelihood of a U.S.-EU deal stood at “50-50” or lower, emphasizing that the EU’s urgency to finalize an agreement contrasted with Washington’s firm stance on tariff reductions [1]. The proposed 30% levy, initially announced in July 2025, targets European exports such as French cheese, Italian leather, and German electronics. In response, the EU has prepared retaliatory tariffs exceeding €93 billion ($109 billion) on American imports should negotiations fail [3].

Trump’s demand aligns with his administration’s strategy of using tariffs as leverage in trade negotiations. While he did not specify the EU’s required concessions, officials noted that the bloc must offset the tariff burden—likely through trade concessions or financial mechanisms—to avoid reciprocal duties. This approach mirrors the U.S.-Japan agreement, where Japan offered investment commitments in exchange for tariff reductions. However, EU diplomats have signaled no plans to replicate such terms, complicating negotiations [3].

The European Commission has maintained that preventing the 30% tariff is its top priority, with President Ursula von der Leyen set to meet Trump in Scotland to address the impasse. Both sides face pressure to resolve the dispute before August 1, when the tariffs are set to take full effect. EU trade officials have criticized the U.S. for shifting positions, including Trump’s abrupt reversal in July of a ban on steel and aluminum imports, which had been a key demand in the EU’s negotiations [3].

Analysts highlight the high stakes of the talks, with the EU’s prepared retaliatory measures signaling its resolve to avoid unilateral concessions. Peter Navarro, a White House trade adviser, cautioned that the EU’s recent public statements on compromise should be treated with skepticism, underscoring the unpredictability of Trump’s negotiations [3]. Meanwhile, Trump’s 50-50 assessment suggests a willingness to abandon the deal if the EU fails to meet his terms—a stance that could further strain transatlantic relations.

The broader implications extend beyond tariffs, reflecting Trump’s emphasis on economic nationalism and his skepticism of multilateral agreements. During his remarks, he also reiterated calls for the EU to limit immigration and reduce reliance on wind power, framing these issues as interconnected with trade priorities [4]. This multifaceted approach underscores the administration’s focus on reshaping U.S. economic policy through bilateral negotiations rather than multilateral frameworks.

The outcome of the Trump-von der Leyen meeting remains pivotal. A failure to reach an agreement could escalate tensions with the EU, the U.S.’s largest trade partner, and disrupt global supply chains. Conversely, a deal would demonstrate the Trump administration’s ability to blend punitive measures with pragmatic economic incentives—a model that could influence future trade negotiations [3].

Sources:

[1] [Trump tells EU it must "Buy Down" 30% tariff to seal trade agreement] [https://www.mitrade.com/au/insights/news/live-news/article-3-988927-20250726]

[2] [Donald Trump predicts 50% chance of trade deal with EU] [https://www.washingtontimes.com/news/2025/jul/25/donald-trump-predicts-50-chance-trade-deal-eu/]

[3] [European Commission president to meet with Trump as trade negotiation deadline nears] [https://www.businesstimes.com.sg/international/global/trump-says-there-50-50-chance-trade-deal-eu]

[4] [Trump says Europe needs to ‘stop the windmills’ and better limit immigration] [https://www.seattlepi.com/news/politics/article/the-latest-trump-leaves-for-scotland-to-20785927.php]