EU and South Korea Push for U.S. Trade Deals to Alleviate Tariff Strain

By Philip Blenkinsop and Hyunjoo Jin

BRUSSELS/SEOUL () – The European Union and South Korea stated on Monday that they are negotiating trade agreements with U.S. President Donald Trump aimed at mitigating the impact of potential tariffs, as Washington warns of significant duties starting in August.

On Saturday, Trump escalated his trade conflict, announcing plans to implement a 30% tax on nearly all goods coming from the European Union and Mexico starting next month. This follows comparable threats directed at other nations such as Japan and South Korea, major players in the Asian economy.

In Brussels, during discussions among EU trade ministers regarding the tariff risk, European Trade Commissioner Maros Sefcovic cautioned that a 30% tax could nearly stop commerce between the U.S. and the 27-member group, who are presently their top trading partners.

He remained hopeful, nevertheless, that discussions between Washington and the European Union were moving toward a favorable result for both parties.

"We must take action, and I am absolutely determined to do whatever possible to avoid this highly negative situation," Sefcovic stated.

A White House economic advisor named Kevin Hassett stated on Sunday that the current trade agreements between nations have not met President Trump's expectations, noting that unless these proposals are enhanced, "the tariffs will be implemented."

The president believes that agreements should be improved," Hassett said during an interview with ABC's This Week show. "Essentially drawing a clear boundary, he issued these letters to people, and we'll find out how things develop.

The impending tariffs raised concerns within Germany, the European Union's largest economic power.

Following Chancellor Friedrich Merz's statement on Sunday that a 30% tax would severely impact the German exporting sector, the leader of the German Association of Chambers of Commerce and Industry urged immediate steps to be taken.

An increasing tariff dispute with the U.S. presents a major risk for numerous German businesses," stated Volker Treier on Monday. "Harsh discussions are required now to prevent the breakdown of transatlantic commerce.

The European Union has thus far refrained from taking retaliatory actions to prevent a worsening cycle of mutual retaliation in the trade conflict as long as there is still potential for achieving a better result through negotiations.

However, Italy's Foreign Minister Antonio Tajani stated that the EU has already created a list of tariffs valued at 21 billion euros ($24.5 billion) on American products in case the two parties do not finalize a trade agreement.

Meanwhile, European businesses are bracing themselves for the worst-case scenario.

The producers of Italy's famous Chianti wine from Tuscany have called for an updated exporting plan supported by the European Union, focusing on emerging markets like South America, Asia, and Africa.

MARKETS LEFT GUESSING

After coming back to the White House at the start of this year, Trump has aimed to employ various tariffs to strengthen the American economy, encourage businesses to invest within the country, and revive industries such as manufacturing.

The first "Liberation Day" tariff declaration he made in April established a base rate of 10% on all imported goods, with increased taxes applied to specific items or nations, triggering concerns about worldwide supply chain issues and causing significant market turmoil.

However, later reversals and postponements, such as a 90-day suspension of most tariffs intended to provide time for trade agreement discussions, have made investors mostly accustomed to Trump's unpredictable policy changes.

European shares declined on Monday, as U.S. futures indicated a weaker start for Wall Street following the most recent developments. European automotive and beverage sector stocks experienced significant losses.

SCRAMBLE FOR DEALS

The approaching August 1 deadline has prompted urgent efforts from global governments to finalize trade deals.

The leading South Korean trade official stated on Monday that reaching an agreement in principle before the deadline could be feasible, and hinted that Seoul might consider granting the U.S. increased access to its agricultural market, according to domestic news outlets.

Trade Minister Yeo Han-koo, who met with American officials recently, stated that South Korea aims to prevent "unjust" U.S. taxes on critical industries vital to its manufacturing strength, which could harm collaboration with its primary defense ally and economic partner, according to news outlets.

"It may be feasible to arrive at a general agreement during the U.S. tariff discussions, followed by additional time for more detailed negotiations," reported the Newsis news agency, quoting Yeo speaking to local media journalists.

He also said, 'Twenty days aren’t sufficient to develop a flawless agreement that includes all specifics.'

South Korea is working quickly to finalize a trade agreement in an effort to prevent a 25% tax on its goods, similar to what Japan currently experiences.

(Assisted reporting from Milan Strahm, Cristina Carlevaro, David Lawder, John Revill, Andreas Rinke, Wayne Cole, and Emma Rumney; written by Keith Weir; edited by Joe Bavier)