EU and US Seek Common Ground in Trade Talks as Tariff Tensions Loom

The Foreign Affairs Council (Trade) convened on Wednesday with EU ministers reaffirming a united front amid ongoing trade tensions with the United States. At the heart of discussions was a concerted push to de-escalate the transatlantic tariff standoff and chart a sustainable path forward.

With a 90-day pause currently in place on a controversial package of US trade measures—matched by a corresponding freeze on EU countermeasures—leaders stressed the importance of using this window to find a balanced solution.

“We are meeting at a halfway point,” said Michał Baranowski, Undersecretary of State at Poland’s Ministry of Economic Development and Technology, who is responsible for trade. “Europe is about building bridges, not walls. Our approach is to negotiate, but also prepare for plan B.”

The US, under its recent “rebalancing” tariff strategy, has imposed a sweeping range of duties: 25% on steel, aluminium, and related products; 25% on cars and auto parts; and a 10% baseline tariff on all imports. While some measures remain paused until 9 July, the EU has delayed its first set of countermeasures until 14 July, hoping that diplomacy can still prevail.

The Council agreed that while negotiations are the preferred route, the EU must be ready to act if talks falter. Ministers pledged to continue monitoring risks of trade diversion and to accelerate efforts to diversify trade routes and boost the single market’s internal potential.

Security Meets Strategy: Economic Resilience in Focus

Beyond transatlantic tensions, the Council also turned its attention to European economic security. A strategic discussion unfolded around the review of the Foreign Direct Investment (FDI) Screening Regulation, new export controls, and governance over outbound investment.

Ministers backed the Commission’s “promote, protect, and partner” approach, calling for better coordination and a balanced strategy to safeguard Europe’s economic interests.

The Commission outlined its progress in streamlining governance on economic security and highlighted the growing importance of co-ordinated action in the face of global shifts in trade and investment dynamics.

Eyes on the Globe: Trade Talks Expand

Over a working lunch, Ministers reviewed the EU’s global trade negotiations. Talks are underway with India, Australia, Indonesia, Thailand, the Philippines, Malaysia, and the Gulf Cooperation Council. Meanwhile, deals with Mercosur and Mexico are nearing completion.

Despite challenges, Ministers seemed optimistic about the EU’s global trade agenda. Strengthening trade ties beyond traditional partners is a key part of the bloc’s strategy to remain resilient in an increasingly unpredictable global market.

With tariffs poised to snap back into place by mid-July, the coming weeks will test whether diplomacy and cooperation can outpace confrontation.