EU Grapples with US Tariffs, Chinese Trade Imbalance, and New Sanctions Package

The European Union faced a turbulent 24‑hour period, confronting fresh U.S. tariffs and escalating trade tensions with China. Both developments underscore the bloc’s struggle to balance its relationships with the world’s two largest economies.

New U.S. Tariff Wave. Late Thursday, President Donald Trump imposed additional duties on at least 60 trading partners, including the EU, citing forced‑labour concerns. The measures, ranging from 10 % to 12.5 %, replace the earlier global 10 % tariff that expired at midnight. EU Trade Director Bernd Lange condemned the move as “crazy” during a broadcast on Europe Today, noting that the EU’s forced‑labour legislation surpasses that of the United States. Commission spokesperson Olof Gill confirmed that the U.S. action establishes a 10 % tariff for the EU and restores exemptions for products such as cork, diamonds, aircraft parts, generic medicines, and active pharmaceutical ingredients, aligning with previous EU‑U.S. commitments.

Google Fine Sparks Transatlantic Friction. The European Commission levied two penalties totalling €890 million against Google for breaching the Digital Markets Act. U.S. officials, including Undersecretary Jacob Helberg and Trade Representative Jamieson Greer, criticized the DMA as a penalty on industry leaders and warned it could jeopardize the slender EU‑U.S. trade agreement. Google’s Kent Walker stated the DMA continues to “break” everyday services and gave the firm 60 days to pay and adjust its practices. Commission spokesperson Thomas Regnier asserted that EU digital rules are non‑negotiable. The episode harkens back to Trade Commissioner Maroš Šefčovič’s earlier push to postpone a similar Google antitrust fine to protect the trade framework finalized a year ago.

Brussels‑Beijing Dialogue Face Hurdles. A nine‑member EP delegation led by Foreign Affairs Committee chair David McAllister concluded a fact‑finding mission in China aimed at reviving an eight‑year frozen dialogue. The visit was complicated by EU sanctions on Chinese nationals linked to dual‑use technology supplied to Russian weapons, and by the looming October deadline to address a ballooning trade deficit. The deficit reached nearly €360 billion in 2025, up from €312 billion the previous year. EU Vice‑President Javier López, commenting on Europe Today, cautioned against invoking the anti‑coercion instrument (“trade bazooka”) and urged that China’s daily €1 billion trade surplus be resolved through dialogue and cooperation.

21st EU Sanctions Package Against Russia. EU ambassadors approved the bloc’s 21st sanctions package against Russia on Thursday, a measure that continues to draw global attention. Notably, the accord grants Greece a temporary exemption to keep shipping Russian liquefied natural gas to non‑EU customers. The package also weakens the proposed entry‑visa ban on former Russian combatants and freezes the Russian oil price cap at $44 per barrel for one year, reducing market uncertainty amid renewed hostilities between the U.S. and Iran. Additional targets include 33 banks, 14 crypto platforms, 41 shadow‑fleet vessels, and 218 individuals, organizations, and companies—including 37 long‑range drone producers—and major oil refineries in Belarus and Georgia. Detailed analysis by Jorge Liboreiro and Luca follows.

Read more below.

Chaotic sanctions negotiations expose cracks in EU front versus Russia

For Brussels, this week’s agreement on a new sanctions package against Russia marks another milestone in the collective effort to undermine the economic engine sustaining Moscow’s full‑scale invasion of Ukraine.

“At a time when Ukraine has built military momentum, our sanctions continue to weaken the economic foundations of Russia’s war effort,” said European Commission President Ursula von der Leyen.

“We are hitting Putin where it hurts most: cutting off the financial lifelines he relies on to sustain his war,” added High Representative Kaja Kallas.

However, the deal—and the fraught negotiations behind it—revealed growing fractures in the political unity that has underpinned the EU’s most ambitious sanctions regime. Jorge and Luca’s reporting offers an inside look at how the final decision was reached.

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We’re also keeping an eye on

• Environment and climate ministers will meet in Dublin, Ireland for an informal environment council.
• European Commissioner for Defence and Space Andrius Kubilius continues his trip through Washington, DC.
• EU foreign policy chief Kaja Kallas continues her trip in Manila, Philippines on the sidelines of the ASEAN foreign affairs ministers meeting.

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