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 United States banned alcohol, dairy and motorcycles from Canada. The president said he would lift the tariff on Irish whiskey during a visit to Ireland. He threatened tariffs on the European Union over Canada's bid for associate membership. He signed a bill on sanctions against Russia that carries tariff powers, and backed a plan to ease some of those sanctions. Xi visited him as the two countries extended their tariff truce.
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.
