Donald Trump’s ongoing dispute with Friedrich Merz is complicating the European Union’s efforts to finalize a trade deal with the U.S. before potential new tariffs take effect.
On Thursday, the former U.S. president hesitated to delay his proposed 25% tariff on European cars and trucks, reportedly due to lingering frustration with the German chancellor’s criticism of the U.S. stance on Iran, according to a source familiar with the matter. This has heightened concerns among senior EU officials that failing to secure the trade agreement before Trump’s July 4 deadline could lead to escalating tensions. While EU negotiators remain optimistic about meeting the timeline, the extended window leaves room for Trump’s personal grievances to resurface.
For Trump, policy and personal matters often intertwine. His dissatisfaction with Merz is unrelated to the trade deal itself, but in Trump’s world, everything is interconnected.
Currently, both sides are maintaining a fragile truce. After a call with European Commission President Ursula von der Leyen, Trump stepped back from his earlier threat to impose immediate auto tariffs. “They haven’t fully upheld their commitments, which has frustrated the president, but I expect they will by July 4,” said Kevin Hassett, White House National Economic Council Director, in an interview with Bloomberg TV.
Neither the White House nor the European Commission provided comments on the matter.
Trump’s approach remains consistent: issue ultimatums, then adjust deadlines. The new July 4 target aligns with the EU’s internal timeline, as EU trade chief Maros Sefcovic had already called for the deal’s implementation by then.
However, challenges persist. Germany is attempting to mend relations with Trump, with its foreign minister reaffirming Berlin’s support for preventing Iran from acquiring nuclear weapons. Yet Trump’s threat to withdraw over 5,000 U.S. troops from Germany remains unresolved, leaving a sensitive issue that could reignite tensions.
Additionally, the EU faces internal hurdles in finalizing the trade agreement. While the U.S. has partially implemented the deal, the EU is still navigating its legislative process. The European Parliament and member states are debating amendments, including adding an expiration date and ensuring the U.S. fully honors its commitments before the deal takes effect.
“We’re committed to the deal but need guarantees if the other side doesn’t comply,” said Bernd Lange, chair of the European Parliament’s trade committee.
Despite these debates, the EU is eager to ratify the agreement to avoid a trade war and provide stability for European businesses. U.S. officials, however, have warned against significant changes to the original terms, cautioning that such moves could limit the deal’s benefits and lead to the reinstatement of pre-deal tariffs.
During recent negotiations, EU officials made progress but failed to resolve key issues. “I’m confident we’ll find a reasonable compromise,” Lange said, while Sefcovic noted that significant strides had been made, though nothing is final until all details are agreed upon.
The next round of talks is scheduled for May 19, with hopes of reaching an agreement that could be ratified in June. Until then, EU officials must contend with the possibility of Trump’s frustrations resurfacing.
In addition to his grievances with Germany, Trump has recently criticized Italy’s Giorgia Meloni, the pope, and even mused about leaving NATO. He also remains months removed from his controversial demand to acquire Greenland, a Danish territory.
After his conversation with von der Leyen, Trump refrained from further criticism of Europe but framed the issue through a U.S.-centric lens. “I agreed to give her until our Country’s 250th Birthday,” he posted on Truth Social. “Otherwise, their Tariffs will immediately rise to much higher levels.”