European trade negotiator Maroš Šefčovič said trade talks between the European Union and the United States are showing encouraging progress after he met U.S. Trade Representative Jamieson Greer in Paris on Wednesday. The meeting signalled constructive engagement at a high level, but the negotiations are unfolding against a backdrop of renewed trade tensions following an abrupt increase in U.S. tariffs on steel and aluminum.
The Trump administration announced an immediate doubling of tariffs on steel and aluminum imports, raising duties from 25% to 50% for most trading partners. The move, which excludes the United Kingdom, sent ripples through global metal markets and provoked strong reactions from European business groups and government officials. Many observers said the hike risks undermining fragile goodwill generated by the latest round of negotiations.
Šefčovič emphasized that both the EU and the U.S. confront a shared structural problem: global overcapacity in steel production. He argued that cooperation, rather than unilateral tariff increases, would be a more effective way to address the underlying supply imbalance. Working together on rules, enforcement and capacity-reduction measures would, in his view, produce better outcomes for workers and companies on both sides of the Atlantic.
The timing of the tariff change added pressure to ongoing talks. Wednesday was also the deadline for countries to submit their best trade proposals under a 90-day negotiation window designed to prevent wider “reciprocal” tariffs from taking effect. Those reciprocal measures are scheduled to begin on July 8 unless negotiators can reach acceptable commitments to ease trade frictions.
So far, the United Kingdom is the only country to have reached a preliminary agreement within the 90-day period. Prime Minister Keir Starmer expressed confidence that UK steel tariffs would be reduced to zero in the coming weeks, a development that would remove an immediate burden on British industry and could serve as a model for other partners seeking similar exemptions.
EU officials said they will continue intensive consultations with U.S. counterparts to try to keep the negotiation path open. The goal is to translate the positive tone from high-level meetings into concrete, enforceable agreements that address excess capacity, protect jobs and preserve fair competition. Key elements under discussion include clearer rules on state subsidies, stronger import monitoring, and joint enforcement mechanisms to prevent market-distorting practices.
European businesses have highlighted the economic risks of higher tariffs. Steel and aluminum producers, as well as downstream manufacturers that rely on these metals, warned that sudden cost increases would erode competitiveness, raise production costs and potentially trigger job losses across supply chains. Exporters also cautioned that retaliatory measures could escalate trade frictions and hurt broader economic recovery efforts.
In Brussels, EU trade policymakers stressed that reciprocal responses remain on the table if talks do not yield adequate safeguards for European industries. At the same time, they reiterated a preference for diplomacy and negotiated solutions, noting that unilateral tariff spikes tend to produce uncertainty and market volatility.
Analysts said the current phase of talks will be critical: negotiators must rapidly narrow differences and identify pragmatic steps that both sides can accept. Possible short-term measures include targeted exemptions, temporary tariff rollbacks contingent on monitoring, or coordinated initiatives to address capacity through international fora. Longer-term solutions would likely require comprehensive agreements on industrial subsidies, capacity management and trade remedies to prevent future escalation.
For now, markets and policymakers are watching closely. The next steps will depend on whether the constructive tone signalled by recent meetings can be sustained and translated into binding commitments. If negotiators succeed, they could defuse an immediate crisis in metals markets and set a framework for more stable transatlantic trade relations. If they fail, higher tariffs and retaliatory measures could deepen tensions and disrupt industrial supply chains on both continents.