The European Union is threatening to suspend the ratification of a major trade agreement with the United States in response to President Donald Trump's announcement of a sweeping 15% baseline tariff on global imports. The "Turnberry Agreement," negotiated under European Commission President Ursula von der Leyen, will not advance in the European Parliament until the U.S. provides "clear and binding legal guarantees" regarding its trade policy, according to Bernd Lange, a leading trade official in the European Parliament.
The decision follows the U.S. Supreme Court's move to block emergency tariffs previously imposed by Trump, after which the administration revealed plans for new global tariffs of up to 15%. This policy shift, enacted via an executive order, affects approximately $3.2 trillion in annual imports across more than 150 countries, marking a 50% increase from the previous 10% baseline and representing the broadest tariff application in modern U.S. economic history.
The draft EU-US agreement itself foresees a 15% tariff on most EU exports to the U.S., with some facilitations planned for U.S. imports into the EU. However, the U.S. is maintaining high tariffs on European steel and aluminum, a point of contention. European lawmakers warn that the current legal uncertainty surrounding U.S. policy—described as "frequently changing and legally questionable"—could lead to "customs chaos" and makes ratifying any agreement risky.
The U.S. tariff increase has sent immediate shockwaves through global markets and diplomacy. The Dow Jones Industrial Average dropped 450 points following the announcement. The European Union has called an emergency meeting, while China's commerce ministry expressed "deep concern." Japan, South Korea, and ASEAN nations are discussing a coordinated response, and several countries have threatened retaliatory tariffs.
Implementation is set to occur in three phases over 90 days, beginning on April 15, 2025, with full implementation by June 15, 2025. The Congressional Budget Office has projected that such broad tariffs could reduce U.S. GDP growth by 0.5-0.8% annually and increase consumer prices by 2-4%. The National Association of Manufacturers estimates production cost increases of 8-12% across affected industries.
