EU Strikes Massive Mercosur Trade Deal Amid Trump Tariffs Pushing Transatlantic Tensions to New Global Economic Battleground

Welcome to European Union Tariff News and Tracker, your essential update on the tariffs reshaping global trade. As of early 2026, the US under President Trump maintains an overall average effective tariff rate of 16.8 percent, generating about $300 billion in revenue through November 2025, according to Wikipedia's detailed timeline on tariffs in the second Trump administration.

Tensions with the European Union remain high after a turbulent 2025. Trump threatened 30 percent tariffs on EU goods starting August 1, unless the bloc slashed its trade surplus by buying more American cars, agriculture, oil, and gas. The EU countered with retaliatory plans targeting up to €100 billion in US imports, though it dropped alcohol tariffs following lobbying from Ireland, Italy, and France. By July 27, they struck a 15 percent deal—more than triple the prior 4.8 percent average on European goods—via executive order, with Trump claiming $750 billion in EU energy purchases and $600 billion in investments, commitments the EU called non-binding. Wikipedia reports Trump once labeled the EU "nastier than China" amid stalled talks.

In response to Trump's protectionism, the EU fast-tracked diversification. Reuters and Euronews confirm that on Friday, EU states cleared the landmark Mercosur trade deal after 25 years of negotiations, set for signing next Saturday in Asunción, Paraguay. This mega-pact with Argentina, Brazil, Paraguay, and Uruguay eliminates duties on 91 percent of EU exports over 15 years, scrapping 35 percent car tariffs, 27 percent on wines, and more, saving EU exporters over €4 billion annually. Mercosur gets phased access to 99,000 extra tonnes of EU-market beef, with safeguards for brands like Parmigiano Reggiano. European Commission President Ursula von der Leyen hailed it as a geopolitical win against US tariffs and Chinese influence, despite French protests and farmer unrest—Paris secured €45 billion in farm aid but vows to fight ratification in Parliament.

The Pig Site notes Mercosur's high baseline tariffs like 35 percent on car parts drove the urgency, positioning Europe to offset US losses. As Trump eyes further "reciprocal" hikes based on trade deficits—the EU faces a calculated 20 percent despite its mere three percent actual duties—this deal signals Brussels' bold pivot.

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