Trump gives EU July 4 ultimatum on trade deal, threatens steeper tariffs

US President Donald Trump on Thursday gave the European Union until July 4 to implement a stalled transatlantic trade agreement, warning that Washington would otherwise impose “much higher” tariffs on European goods, including automobiles.

The warning, delivered after a phone call with Ursula von der Leyen, marks a sharp escalation in transatlantic trade tensions that had briefly eased after last year’s Turnberry agreement between the US and the EU.

Trump said he would hold off — for now — on raising tariffs on EU cars and trucks to 25 per cent from the current 15 per cent level, but only until July 4, when the United States marks the 250th anniversary of its independence.

“A promise was made that the EU would deliver their side of the Deal and, as per Agreement, cut their Tariffs to ZERO!” Trump wrote on Truth Social, accusing Brussels of failing to move fast enough on implementing the pact agreed in Scotland last summer.

More from Business

“I agreed to give her until our Country’s 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels,” he added.

The latest threat comes amid growing frustration inside the White House over the slow pace of European ratification, with US officials warning that the administration could widen tariff action beyond the auto sector if negotiations continue to drag.

Europe races to avoid tariff escalation

The Turnberry agreement, struck in July 2025, reduced Trump’s sweeping “Liberation Day” tariffs on most EU exports to 15 per cent. In exchange, Brussels agreed to eliminate tariffs on American industrial goods and grant preferential access to US agricultural and seafood products.

But nine months later, the implementing legislation remains stuck in negotiations between the European Parliament and the Council representing EU member states, delaying the tariff reductions from taking effect.

European Parliament trade committee chair Bernd Lange said negotiators had made progress during a second round of trilogue talks but admitted major differences still remained.

“We have just concluded a constructive second trilogue during which we made good progress on the issue of the safeguard mechanism and the review and evaluation of the main regulation, but there is still some way to go,” Lange said in a statement.

Another round of negotiations is scheduled for May 19.

EU divisions complicate negotiations

The talks have become increasingly contentious as lawmakers push for stronger safeguards against potential future US tariff action.

Several European lawmakers want provisions allowing the EU to suspend the agreement if Washington fails to comply with its obligations. Others want tariff cuts tied directly to continued US compliance and have proposed ending EU concessions entirely by March 31, 2028.

However, many EU governments are resisting those demands, fearing prolonged negotiations could provoke Trump into carrying out his tariff threats. Diplomats involved in the discussions said member states are pushing for faster implementation to avoid a damaging escalation in transatlantic trade tensions.

The tariff threat has alarmed Europe’s auto industry, particularly Germany, which would be among the hardest-hit economies if the US proceeds with higher duties on imported vehicles.

German Economy Minister Katherina Reiche said she was holding intensive talks with US officials and remained hopeful that both sides could “solve this challenge”.

Trump keeps broader tariff options open

Von der Leyen sought to strike a conciliatory tone after speaking with Trump, saying both sides remained committed to implementing the trade agreement.

“We remain fully committed, on both sides, to its implementation. Good progress is being made towards tariff reduction by early July,” she wrote on X.

She added that the two leaders also discussed the situation in West Asia and agreed that Iran must never possess a nuclear weapon.

The latest dispute highlights Trump’s increasingly aggressive trade posture during his second term, despite a US Supreme Court ruling earlier this year limiting the administration’s ability to impose sweeping tariffs under emergency powers.

While that decision curtailed some White House authorities, Trump still retains the ability to impose sector-specific duties under separate national security laws. That leaves sectors such as automobiles, pharmaceuticals and semiconductors vulnerable to additional tariff action.

With inputs from agencies.