U.S. plays hardball on tariffs deadline as EU battles for a deal

The bloc, meanwhile, is scrambling to reach an agreement with the U (something worth watching)

Arnaud Girod, head of economics and cross-asset strategy at Kepler Cheuvreux, told CNBC that a tariff rate of 15%-20% "would be a total car crash for European exports

Additionally, "President Donald Trump speaks at a dinner for Republican Senators at the White House in Washington, DC, on July 18, 2025

Photo by Allison Robbert/For The Washington Post via Getty ImagesThe U

Moreover, Has signaled it will not let up on its Aug. 1 deadline for higher tariffs on the European Union as the bloc fights to strike a deal in time

Moreover, Commerce Secretary Howard Lutnick said he was confident that a trade deal could be struck with the European Union, but warned that the deadline for a baseline 30% tariff is fixed. "That's a hard deadline, so on Aug. 1, the new tariff rates will come in," Lutnick said Sunday on CBS News when asked the deadline for his EU tariffs

He did signal that talks could continue after this date, however, noting: "These are the two biggest trading partners in the world, talking to each other

Additionally, We'll get a deal done

Nevertheless, I am confident we'll get a deal done. ""Nothing stops countries from talking to us after Aug, considering recent developments

Moreover, 1, but they're going to start paying the tariffs on Aug (something worth watching). 1," he added

In contrast, The EU has said it is preparing retaliatory measures against the U

If punitive trade tariffs are imposed

Lutnick dismissed the possibility of the EU targeting items Boeing airplanes and Kentucky bourbon, however, saying, "they're just not going to do that. "Last-ditch talks to reach a trade agreement are, with the EU hoping it can negotiate a lower tariff rate

The bloc had hoped it could strike a similar pact to the U, in today's market environment. , which was the first country to make a trade agreement with the U

Additionally, But economists and analysts have become increasingly skeptical Brussels' ability to agree on a similar framework, in today's market environment

For one, the EU has a much trickier relationship with U

At the same time, President Donald Trump than the U (quite telling)

Trump has frequently bemoaned what he sees as an imbalanced trade relationship and unfair trading practices, which the EU denies, in today's financial world

According to the European Council, total trade between the EU and U, given current economic conditions

Moreover, Amounted to 1

While the EU ran a trade surplus in goods, it recorded a deficit in services

Additionally, Last Friday, the Financial Times reported that Trump was pushing for a minimum tariff of 15% to 20% on EU imports in any deal with the bloc (this bears monitoring)

Nevertheless, The president was also reportedly happy to keep duties on the auto sector at 25%, a move that would hurt car exporters in Germany particularly hard

Speaking to CNBC's "Europe Early Edition" on Monday, Arnaud Girod, head of economics and cross-asset strategy at Kepler Cheuvreux, said a rate of 15% to 20% "would be a total car crash for European exports (this bears monitoring). ""On top of that, you add the euro strength that we've had

Nevertheless, So that would start to cost and to be very painful for European exports, and, of course, would also potentially, you know, reignite some fears on the inflation front in the U. ," he added

One EU official told CNBC that there has been a shift in mood regarding the bloc's potential response among all EU member states, except Hungary, whose leader, Viktor Orban, is a Trump ally, given current economic conditions

What the re reveals is bloc's potential countermeasures against the U

At the same time, Include levies on imports from the U

On the other hand, Imports ranging from clothing to agricultural ducts and food and drink items could be affected

At the same time, Meanwhile, The Wall Street Journal and Bloomberg reported that an increasing number of EU member states have signaled their support for the bloc deploying its anti-coercion instrument

This's the EU's most powerful trade tool, which would give the European Commission broad powers to take retaliatory action against the U

Kepler Cheuvreux's Girod welcomed the movement around tariff policy in the EU, saying that the bloc was "finally" flexing its muscles and that this was needed to reach an agreement. "They've been very, very, I would say, cool, with the U, in this volatile climate

So far, and now that we're apaching the deadline, they have to sound a bit more aggressive," Girod said, considering recent developments

Conversely, "Not getting a better deal than the U (which is quite significant), given current economic conditions

An issue for the EU, and they have to ve that the whole structure of the EU is helpful. "— CNBC's Silvia Amaro and Matthew Ward-Perkins contributed to this report.