Trump's 30% tariff letter leaves EU scrambling to bring U.S. on side

The European Union has been near scrambling aft U.S. President Donald Trump said helium would slap a 30% tariff connected goods imported from the bloc opening Aug. 1.

European leaders were speedy to respond, saying they would inactive enactment to onslaught an statement with the U.S. earlier the commencement of August. The EU besides further delayed countermeasures which were acceptable to travel into effect this week and warned that preparations for further retaliatory moves were underway.

EU Trade Commissioner Maros Sefcovic connected Monday told reporters that the missive had been received with "regret and disappointment ... particularly considering the precocious signifier of our ongoing negotiations."

Sefcovic stressed that the EU was inactive focused connected uncovering a negotiated solution, but was preparing for each imaginable outcomes — which could see countermeasures. He besides said that helium would talk to his U.S. counterparts aboriginal successful the day.

"I cannot ideate walking distant without genuine effort," the commercialized commissioner said.

With little than a period earlier Trump's caller deadline, the European Union volition person to enactment accelerated to forestall the tariffs from coming into effect oregon risk further escalation.

While EU leaders stay determined to onslaught a deal, economists and analysts warned that the menace of a 30% tariff complaint has nevertheless added caller unit to the 27-member block.

"It's precise atrocious quality for Europe," Alicia Garcia-Herrero, elder chap astatine Bruegel and main economist for Asia Pacific astatine Natixis, told CNBC's "Europe Early Edition" connected Monday.

"Trump is pushing the committee to truly travel up with a amended deal," she added.

Carsten Brzeski, planetary caput of macro astatine ING, and Inga Fechner, a elder economist astatine ING who focuses connected planetary trade, struck a akin tone.

"Trump's missive to the EU is not a emotion missive but besides not a hatred letter. It's a missive to summation unit successful the ongoing negotiations," they said successful a enactment connected Sunday.

The EU nevertheless inactive has options, the economists said, suggesting that 1 attack could beryllium for the EU to connection to boost its purchasing of U.S. products ranging from soybeans to subject equipment.

Brussels could besides trim existing tariffs and different commercialized hurdles connected items specified arsenic U.S. cars, oregon present export bans connected products that are important to the U.S. specified arsenic European-made pharmaceuticals, Brzeski and Fechner said.

"The 4th and last enactment would beryllium to spell into outright retaliation with either expanding tariffs connected US goods oregon the atomic enactment successful trade: tariffs connected integer services but besides tighter regulations connected US tech firms," the economists suggested, noting, nevertheless that this would apt trigger a afloat blown commercialized war.

Despite the further unit for the EU, the anticipation remains that the bloc and Washington D.C. volition onslaught a statement successful the coming weeks.

"I deliberation some sides volition onslaught a compromise. This is successful the champion involvement of some the U.S. and the European Union," said Joerg Kraemer, main economist astatine Commerzbank.

"I expect successful the end, a benignant of mean tariff complaint for the European Union for exports to the U.S. successful the country of 15%," helium told CNBC'S "Europe Early Edition" connected Monday.

Notably, this complaint would beryllium higher than the 10% that had antecedently been anticipated by galore and is successful enactment with the woody that has been agreed upon by the U.K. and U.S.

Berenberg Economist Salomon Fiedler meantime appeared much optimistic, saying successful a enactment that the slope was inactive expecting 10% duties adjacent arsenic "the risks are present powerfully skewed towards higher rates."

One crushed for optimism is that Trump has repeatedly taken utmost positions initially, and past aboriginal compromised, Fiedler argued. "The information that Trump lone threatened the caller 30% complaint for 1 August, alternatively of implementing it much quickly, suggests helium is inactive looking to negotiate," helium said.

Trump whitethorn besides shy distant from further tariffs arsenic businesses commencement passing connected higher import costs to consumers, Fiedler suggested. The home governmental backdrop whitethorn besides change, which could marque it little important for the U.S. president to effort and support nationalist attraction connected trade, helium added.

On the flipside, hazard factors for higher levies see the unlikelihood that the U.S.' commercialized deficits — which Trump has often utilized arsenic an statement for tariffs — volition disappear, and the U.S. administration's reliance connected tariff incomes to supplement its budget, according to Fiedler.

"The ever distant anticipation of a bully dialog result — the bilateral removal of each tariffs and immoderate different commercialized barriers betwixt the EU and the US — has each but disappeared from presumption by now," helium noted.