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EU Delays Trade Deal with Trump Sparks Tariff Tensions

Bloomberg Markets •
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The European Union is testing President Donald Trump's patience by delaying ratification of a trade deal negotiated seven months ago, risking higher tariffs on European exports. German Chancellor Friedrich Merz will meet with Trump at the White House on Tuesday as tensions mount over the stalled agreement. The EU's executive arm has pushed for approval since July, but the European Parliament has repeatedly postponed a final vote.

Trump's administration faces pressure to replace emergency tariffs after the Supreme Court struck down his original plan last month. The White House imposed 10% across-the-board tariffs for 150 days, with plans to raise them to 15%. US Trade Representative Jamieson Greer is preparing to launch new investigations under Section 301 authority to eventually establish permanent tariff rates. The EU's delay creates uncertainty as other trading partners have largely implemented their agreements.

Former Trump trade adviser Kelly Ann Shaw warned that Europe is "playing with fire" by questioning US commitment to the deal. EU officials argue they need clarity on Washington's next steps before proceeding. The situation is complicated by ongoing disputes over steel and aluminum tariffs at 50%, plus threats of new measures against European technology companies. With Trump known for impulsive reactions to perceived slights, the delay could trigger a more aggressive US response, potentially making the EU his first target since the Supreme Court ruling.