Overview

• Trump has ruled out a zero-tariff deal and insists on a base duty of at least 15–20%, warning of a 30% general tariff on EU imports from August 1
• Brussels has drafted an initial €21 billion list of counter-tariffs and is preparing a second €72 billion package to target US sectors if Washington stands firm
• German Chancellor Friedrich Merz acknowledged that achieving a no-new-tariffs agreement is unrealistic as EU diplomats brace for lasting duties and push for limited carve-outs
• US inflation rose to 2.7% in June as import levies begin to lift consumer prices, unsettling equity and bond markets and heightening pressure on Federal Reserve policy
• Economists warn that rerouted European exports flooding the single market could boost supply and paradoxically drive down consumer prices in Europe