EU Finalizing Countermeasures

EU Trade Commissioner Sefcovic will meet US Trade Representative Greer in Paris on Wednesday. This meeting comes as tensions rise, with Trump threatening to impose a 50% tariff on the EU to speed up trade talks. The tariff was paused, with a deadline set for July 9. Recently, Trump raised tariffs on steel to 50%, prompting the European Commission to respond. They announced their readiness to retaliate against these tariffs on steel and aluminum. An EU spokesperson stated that the Commission is finalizing plans for further countermeasures. If a solution is not reached, the existing and new EU measures will take effect on July 14. The message here is clear: tensions are escalating between the US and EU, with steel and aluminum at the center of the conflict. The European Commission is preparing to act, and deadlines are crucial—they are linked to real policy changes. The steel tariffs are already in place, and Trump’s proposed 50% levy on EU goods is serious business. We have just over a week to resolve issues before facing strong reactions. Sefcovic’s meeting with Greer is not just regular diplomacy. It will test if discussions can still bring positive results before new measures take effect. Preparations for retaliation are already happening; the EU spokesperson was clear about that. There is no uncertainty—countermeasures are nearly ready. The Commission is not going to enter the second week of July without a plan. For those involved in transatlantic supply networks, especially in heavy industry and manufacturing, the time to adjust is running out. Profit margins that depend on price stability won’t benefit from waiting until after early July. That date is critical—it marks when clear policy changes are expected to begin. By July 14, the EU will have moved forward, unless there’s a sudden diplomatic shift.

Implications On Market Volatility

Markets are aware of this situation. Prices for steel and aluminum are already reflecting uncertainty, as are the hedging volumes for products that rely on these resources. Sourcing decisions and contract revisions should not wait for announcements. Both sides have made their timelines public, and it would be risky to be caught off guard. It’s time to pay attention not only to political statements but also to actions taken—such as publishing measures and legal notices. These steps give weight to what is said. When the Commission makes statements like this, they usually act on them. Given these developments, price volatility in related contracts could rise. Liquidity may decrease in certain parts of the derivatives market, especially for contracts tied to US-EU trade or industrial inputs. As we assess our exposures, doing nothing could lead to shocks that are already being signaled. One more point to consider is the timeline. If the Commission’s responses occur on July 14 and the US deadline is July 9, the five-day gap could create additional volatility. Even if we aren’t directly trading linked assets, correlations often spike during tariff disputes—especially among raw materials, shipping, and energy-intensive production. Create your live VT Markets account and start trading now.

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