EU Seeks Coordination With Tariff-Hit Nations, Keeps ‘Anti-Coercion’ Tool Shelved As Trump Threatens 30% Duties

As President Donald Trump sent letters to the European Union (EU) and Mexico over the weekend, the 27-nation bloc is reportedly looking to rally together other nations hit with a similar predicament.

On Saturday, Trump shared on Truth Social screenshots of a letter he sent to European Commission (EC) President Ursula von der Leyen in which he warned of a 30% tariff rate that would be applicable if the EU does not clinch a trade deal by Aug. 1. 

As has been the case with the letters the president sent last week to over 20 countries, he clarified that the 30% rate is in addition to the sectoral tariffs. 

He also discussed a higher levy for transshipped goods, promised an exemption if companies from the bloc decided to set up manufacturing in the U.S., and vowed to retaliate if the EU reciprocated. 

Trump’s barrage of letters to trading partners has created uncertainty in the markets. The U.S. stock futures fell in overnight trading. The market, however, has largely stayed resilient, with the SPDR S&P 500 ETF (SPY) up 7% so far this year. The iShares Europe ETF (IEV) is up a steeper 24% year-to-date.

The SPY was the most active ticker on Stocktwits late Sunday, with the sentiment toward the ETF remaining ‘bearish.’

In a statement released in response to Trump’s letter, the EC said, “We take note of the letter sent by [the] U.S. President Trump outlining a revised tariff rate and a new timeline.”

“Imposing 30 percent tariffs on EU exports would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers, and patients on both sides of the Atlantic.”

While stating that it would continue working toward an agreement by Aug, the EU said, “We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”

It also said it looked to deepen its global partnerships, firmly anchored in the principles of rules-based international trade.

Separately, Bloomberg said Sunday, citing people familiar with the matter, that the EU was attempting to establish contacts with countries, including Canada and Japan, to explore the potential for coordination.

Von der Leyen told reporters in Brussels the EU’s anti-coercion instrument (ACI), which was created for “extraordinary situations,” wouldn’t be used at this point. “We are not there yet,” she said.

French President Emmanuel Macron hit out at the U.S. on X, calling on the EC to assert the union’s determination to defend European interests resolutely. “In particular, this implies speeding up the preparation of credible countermeasures, by mobilising all the instruments at its disposal, including anti-coercion, if no agreement is reached by August 1st.”

Early last week, a Bloomberg report said the EU was scrambling to negotiate a preliminary trade deal framework with the U.S. to sidestep a steeper rate, beginning in early August. The U.S.’s biggest trading partner also sought an exemption from the 10% base levy for key items, including aircraft, aircraft parts, as well as wine and spirits.

Trump also dispatched a letter to Mexico, threatening the country with a tariff rate similar to the one imposed on the EU. 

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CORRECTION: A previous version of this article incorrectly stated that President Trump sent a new tariff letter to Brazil over the weekend. In fact, the letter was sent to Mexico.

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