The clock is ticking. With just over a week to go until President Donald Trump's threatened 30% tariff blitz on most European Union exports kicks in, negotiators on both sides are still locked in tense talks—racing to avoid a transatlantic trade war. Behind closed doors, Brussels is reportedly willing to accept a one-sided deal tilted toward the US if that's what it takes to keep the door open. But with no breakthrough after last week's round in Washington, the path to a deal remains unclear. The US is said to be pushing for sweeping tariffs above 10% on nearly all EU goods—with only narrow carveouts for aircraft, medical devices, and a few industrial tools.
The pressure is already landing on corporate earnings. Stellantis (STLA, Financial) shocked the market Monday with a €2.3 billion first-half loss, including a €300 million blow from US duties alone. And it could get worse. Trump has already slapped a 25% levy on European cars and auto parts, doubled down on metals, and floated fresh tariffs on semiconductors and pharmaceuticals. Copper is now facing a 50% tariff. Altogether, the EU estimates about 70% of its exports to the US—worth roughly $442 billion—are already under pressure. Siemens CEO Roland Busch summed it up: “We need clarity. If there's a deal, we can start deploying capital again. If not, the damage could be significant.”
Investors should be watching closely. If talks fall apart, EU leaders are readying a response that includes retaliatory tariffs on up to €93 billion worth of US goods—from Boeing jets and bourbon to soybeans and motorcycles. There's even talk of adding export controls and restrictions on government contracts. Still, any EU response would require political approval—and risks triggering an even broader escalation. The outcome could reshape earnings forecasts across autos, industrials, and key supply chains. “I'm confident we'll get a deal,” said US Commerce Secretary Howard Lutnick. But with Trump's deadline fast approaching, confidence may not be enough.
