What President Donald Trump announced Friday on Truth Social may mark the sharpest escalation yet in transatlantic trade tensions: a sweeping 50% tariff on all European Union imports starting June 1, blaming a record U.S.-EU trade deficit and what he called “unfair and unjustified” barriers to American goods.
Trump said the EU had been “very difficult to deal with,” referencing trade deficits of over $250 billion a year and blaming Europe for high corporate penalties, value-added taxes, monetary manipulation and aggressive lawsuits against American companies.
He indicated that unless goods are produced in the U.S., they should face tariffs of 50%, calling it “totally unacceptable” that such deficits persist.
What The US Buys From Europe
In 2024, the U.S. imported $687 billion worth of goods from the European Union, according to International Trade Centre data.
The trade deficit reached $236 billion, the largest on record. In March 2025 alone, U.S. imports from the EU were $91.9 billion, with a single-month deficit of $47 billion, nearly double January’s, which was the second largest.
Top 10 US Imports From The EU
In 2024, the top 10 U.S. imports from the European Union included:
- Pharmaceutical products – $134.7 billion
- Machinery and mechanical appliances – $105.1 billion
- Vehicles and parts – $72.9 billion
- Electrical machinery – $43.6 billion
- Commodities (not specified) – $43.5 billion
- Optical and medical instruments – $41.2 billion
- Organic chemicals – $36.6 billion
- Aircraft and spacecraft – $16.9 billion
- Mineral fuels and oils – $15.3 billion
- Beverages and spirits – $14.2 billion
Pharmaceuticals and cars are among the most exposed sectors, with many U.S. firms depending on EU-made inputs. The rising cost of imported components could erode profit margins across industries.
Watch These ETFs
U.S. ETFs exposed to either European stocks or sectors sensitive to import prices could face pressure:
- SPDR EURO STOXX 50 ETF FEZ
- Vanguard Consumer Discretionary ETF VCR
- iShares MSCI Europe Financials ETF EUFN
- Themes European Luxury ETF FINE
- Select STOXX Europe Aerospace & Defense ETF EUAD
Could US Services Be The Next Target?
While Trump’s move covers physical goods, the broader U.S.-EU economic relationship is also affected by services.
According to the European Commission, in 2023:
- The EU imported €427 billion ($478 billion) in U.S. services
- The U.S. imported €318 billion ($356 billion) in EU services
In a note last month, Goldman Sachs economist Filippo Taddei said the EU could target U.S. digital and pharma services through tools like the Digital Services Act, Enforcement Regulation, and the Anti-Coercion Instrument.
Last week, Goldman Sachs economist Giovanni Pierdomenico said a U.S.-EU deal might be more likely in the final stretch of negotiations.
The U.S. raised three demands: lower EU tariffs and non-tariff barriers, fairer digital regulations, and increased EU purchases of U.S. goods. The EU has responded with zero-for-zero industrial tariffs and offers to cut the trade imbalance.
Still, Pierdomenico estimated that if the U.S. imposed 20% tariffs, Eurozone GDP could drop by 0.4% to 1% by end-2026. A 50% tariff would have far more severe implications.
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