The United States and the European Union do more business with each other than any other two economies in the world. Until 2025 most of it crossed the Atlantic at tariffs of a few percent. Donald Trump's second administration put a general tariff on European goods, and the Union accepted fifteen percent in an agreement in July 2025 without retaliating. Since then the president has used new tariffs, or the threat of them, over matters that have nothing to do with trade: Greenland, taxes on technology companies, a fine on Google, and now Europe's dealings with Canada.
The wider relationship and each side's full account: Europe and the United States.
Where it stands · September 2026
The president has warned of very serious tariffs on the European Union if it offers Canada, with which he is in an open trade war, a form of associate membership. He has said he will lift the tariff on Irish whiskey. The tariffs imposed on sixty economies in July over forced labour apply to the Union too. The Commission says it will use every instrument against its trade deficit with China, where goods shut out of America are now going.
What the dispute is about
The deficit. America buys from Europe about two hundred billion dollars more in goods each year than it sells. The administration treats that as a loss. Europe points to America's surplus in services and to the profits American technology firms earn in Europe.
Tariffs as an all-purpose tool. Used to raise revenue, to bring factories home, and to win concessions on unrelated matters. For Europe the third use is the problem: no agreement holds if any quarrel can reopen it.
Whether the deal stands. America's Supreme Court ruled in February that the emergency law behind the tariffs did not authorise them. The president replaced them under other laws. The Union paused the agreement and then approved it.