The European Union has taken a significant step toward escalating trade tensions with the United States by approving a sweeping €93 billion ($109 billion USD) counter-tariff package—but officials say a negotiated resolution remains possible before the August 1 deadline set by the Trump administration.

Even as negotiations continue behind closed doors, the European Commission is preparing for a worst-case scenario. On Thursday, EU diplomats confirmed that member states overwhelmingly approved the Commission’s proposed retaliatory tariffs. These would directly respond to the United States’ threatened imposition of 30% tariffs on a wide range of EU exports.

The countermeasures consolidate two previously proposed tariff lists—one of €21 billion and another of €72 billion—into a single, unified strategy. The EU says the measures are designed to mirror the scope and severity of the U.S. tariffs.

If talks fail, the first phase of EU tariffs will go into effect on August 7, targeting industrial and consumer goods. However, levies on certain agricultural imports such as soybeans and almonds will be delayed until December 1, reflecting the EU’s desire to allow further space for diplomacy.

A second phase of countermeasures will follow in two waves—September 7 and February 7, 2026—impacting broader categories of goods.

Despite prior threats, the EU has so far refrained from implementing any retaliatory tariffs, holding back to create room for negotiation. The first package of countermeasures was authorized in April, but suspended as a sign of good faith.

EU officials now believe a trade agreement with Washington is within reach—though not guaranteed. Sources suggest the framework under discussion would resemble the U.S.-Japan deal from earlier this year, featuring a flat 15% tariff on EU goods, replacing a fragmented set of higher duties.

Under this potential agreement:

Importantly, the proposed 15% rate would not be added on top of current U.S. tariffs, which average about 4.8% across all imports.

The path to an agreement remains unclear. European negotiators have not publicly detailed what the EU might offer to secure a deal. Unlike Japan, the EU is not expected to make investment pledges in the U.S. economy. One possibility under consideration: the EU could reduce its 10% car import duty, though this has yet to be confirmed.

While some EU diplomats speak optimistically of a deal-in-progress, Washington has downplayed the narrative. A White House spokesperson dismissed reports of a draft agreement as “speculation.” Trump's trade adviser, Peter Navarro, was even more skeptical, telling Bloomberg News the EU’s optimism should be taken “with a grain of salt.”

Meanwhile, in Paris, French Finance Minister Eric Lombard and Italian Industry Minister Adolfo Urso said they had not seen any draft and would only comment once a concrete proposal was in hand.

With the August 1 deadline looming, the EU appears to be walking a fine line—demonstrating readiness to retaliate while still offering Washington an off-ramp. If a breakthrough is not reached in the coming days, transatlantic trade could be thrust into a prolonged and damaging tariff war, affecting sectors from agriculture and automobiles to chemicals and pharmaceuticals.

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