Trump gives EU ultimatum to implement trade deal by July 4

Hind Al Soulia - Riyadh - BRUSSELS — US President Donald Trump has given the European Union has until 4 July to fully implement its trade deal with the United States, saying the bloc will face "much higher tariffs" if it fails to slash the levies on US goods to zero.

After a phone call with European Commission President Ursula von der Leyen on Thursday, Trump said he agreed to give her until "our Country's 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels".

However, von der Leyen said the bloc was making "good progress toward tariff reduction" ahead of Trump's deadline.

Hours after the threat, a US trade court ruled Trump's latest 10% global tariffs were not justified under US trade law, which could allow future court challenges.

Trump had introduced the sweeping levy on 24 February after the US Supreme Court decision struck down his so-called "freedom day" tariffs imposed last year.

The president had invoked Section 122 of the 1974 Trade Act which allows temporary duties to be imposed to correct serious "balance of payments deficits" when introducing the new tariff. The 10% levy is set to last until late July.

On Thursday, the US Court of International Trade ruled that law was not an appropriate step for the deficits cited by the president.

However, the ruling does not block the 10% tariffs universally. The judgement applies to importer tariffs for two companies, but paves the way for further court challenges.

A trade deal was struck by von der Leyen and Trump in July last year, but progress on enacting it stumbled on Wednesday after talks between EU lawmakers and governments ended without an agreement.

"We remain fully committed, on both sides, to its implementation," von der Leyen said on X on Thursday.

Under the agreement, US tariffs on exports from the EU would face a 15% tariff. Trump had threatened tariffs of 30% on European goods.

The deal received conditional approval from the European Parliament in March, when a majority of lawmakers backed legislation to implement the agreement, but added several safeguards aimed at ensuring the US honored its side of the pact.

The announcement, which comes amid rising tensions between the EU and the US, postpones a threat made by Trump last Friday when he said tariffs on EU-made cars would be hiked from 15% to 25% sometime this week.

"I've been waiting patiently for the EU to fulfill their side of the historic trade deal we agreed in Turnberry, Scotland, the largest trade deal, ever! A promise was made that the EU would deliver their side of the deal and, as per agreement, cut their tariffs to zero!" the US president wrote on social media.

Referring to the US' independence day, known as the Fourth of July, he said: "I agreed to give her until our country’s 250th Birthday or, unfortunately, their tariffs would immediately jump to much higher levels."

Under a lopsided deal reached last summer, the EU committed to slashing remaining tariffs on US goods. In exchange, the US agreed to an all-inclusive 15% tariff on most EU products that prevented the accumulation of additional duties.

The European Parliament and member states are currently negotiating the legislation that would enable the removal of tariffs. A round of talks failed on Wednesday evening, but legislators hailed progress toward a possible resolution on May 19.

The main sticking point is a demand from lawmakers to insert safeguards in case Trump breaches the joint commitments or threatens the bloc's territorial integrity, as he did earlier this year when he threatened to forcefully seize Greenland from Denmark.

Member states prefer to stick to the original wording, which did not include any safeguards, and implement the deal as soon as possible.

But Trump's threat to hike tariffs from 15% to 25% has further emboldened critics of the agreement who believe the US president will, sooner or later, backtrack and demand more concessions from the Europeans. The White House has repeatedly attacked the bloc's digital and environmental regulations and openly called for their abolition.

In her own social media message, von der Leyen expressed confidence that the pending legislation would be approved before the deadline.

Von der Leyen also reminded Trump that, under the 15% all-inclusive cap in the trade deal, the US cannot unilaterally hike tariffs.

Thursday's phone call, which Trump described as "great", appears to have eased tensions for now. Most officials and diplomats in Brussels did not expect the 25% tariff to materialize, given Trump's track record of issuing threats and then changing his mind.

The two leaders also discussed the conflict in the Middle East.

"We are completely united that Iran can never have a nuclear weapon. We agreed that a regime that kills its own people cannot control a bomb that can kill millions," Trump said.

Von der Leyen echoed the message. "Recent events have clearly shown that the risks to regional stability and global security are too great," she said.