US-EU Trade Talks Strain as Tariff Deadline Nears

Trade negotiations between the U.S. and European Union have grown tense as the U.S. demands quotas and non-reciprocal tariffs, which EU officials argue may breach WTO rules. President Trump is threatening to raise tariffs on nearly all EU exports to 50% if an agreement is not reached by the July 9 deadline, while indicating that many existing tariffs will stay in place even under a new deal. The EU is pushing for a model similar to the U.S.-UK agreement with a 10% baseline tariff, but faces internal disagreements over accepting such terms. In preparation for a potential breakdown, the EU is drafting retaliatory tariffs against U.S. goods. Separately, the U.S. has increased tariffs on Canadian metals, leading Canada to threaten reciprocal measures and fueling wider global trade tensions. Federal Reserve Chair Jerome Powell has cautioned that the full economic effects of these tariffs remain uncertain, contributing to inflationary risk.