US tariffs on European goods threaten to shake up trade ties

The European Union expects to find out on Monday whether President Donald Trump will impose punishing tariffs on America’s largest trade partner in a move economists have warned would have repercussions for companies and consumers on both sides of the Atlantic.

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Trump imposed a 20% import tax on all EU-made products in early April as part of a set of tariffs targeting countries with which the United States has a trade imbalance. Hours after the nation-specific duties took effect, he put them on hold until July 9 at a standard rate of 10% to quiet financial markets and allow time for negotiations.

Expressing displeasure the EU’s stance in trade talks, however, Trump said he would increase the tariff rate for European exports to 50%, which could make everything - from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals - much more expensive in the US

The EU's executive commission, which handles trade issues for the bloc’s 27-member nations, said its leaders hope to strike a deal with the Trump administration. Without one, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes.

US Treasury Secretary Scott Bessent told CNN's “State of the Union” programme on Sunday that "the EU was very slow in coming to the table" but that talks were now making “very good progress.”

Here are important things to know about trade between the United States and the European Union.

The EU's executive commission describes the trade between the US and the EU as “the most important commercial relationship in the world.”