It’s January 2026, and if you walk through a supermarket in Berlin or a motorcycle dealership in Rome, the "trade war" isn’t just a headline—it’s a price tag. Most people think europe tariffs on us are a simple story of revenge, a back-and-forth volley of taxes between Brussels and Washington. Honestly, it is way messier than that.
For the last year, we’ve watched a high-stakes poker game play out across the Atlantic. It’s not just about bourbon and Harleys anymore. We are looking at a fundamental shift in how the two biggest economies on earth talk to each other. Or, more accurately, how they stop talking and start taxing.
The July 2025 "Turnberry" Deal: A Fragile Peace
Back in July 2025, there was this massive sigh of relief. European Commission President Ursula von der Leyen and U.S. President Donald Trump sat down and hammered out what some called the "Turnberry Agreement." Basically, they agreed to a 15% tariff ceiling on most EU exports to the U.S., which was a huge win compared to the 50% threats we were hearing in the spring of 2025.
But here’s the kicker. That deal was asymmetrical. In exchange for that 15% cap, the EU had to scrap a bunch of its own europe tariffs on us products.
- Cars: U.S. cars, which used to face a 10% duty entering Europe, are now effectively duty-free.
- Energy: The EU committed to buying a staggering $750 billion in U.S. energy over three years.
- Agriculture: While the EU kept its strict GMO rules, it opened the doors wider for things like bison meat, almonds, and certain processed fish.
It felt like a truce. But as we’ve seen in the first few weeks of 2026, a truce isn’t a peace treaty.
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Why the EU Retaliation List Still Exists
You might be wondering: if there was a deal, why are we still talking about europe tariffs on us? Well, the EU didn't just delete its retaliatory list. They "suspended" it. It’s like a loaded gun sitting on a desk in Brussels.
Currently, the EU maintains a multi-tier retaliation strategy. If the U.S. pushes beyond that 15% ceiling or hits a "sensitive" sector like Airbus parts, the EU is ready to flip the switch on $84 billion worth of U.S. goods. We aren't just talking about the "cliché" items like jeans and orange juice. The Phase 2 lists include:
- Industrial Machinery: High-end tech and engines used in European factories.
- Petroleum Products: Specifically refined oils and natural gas components.
- Chemicals: Ingredients for everything from paint to plastic.
The EU basically realized that hitting bourbon hurts a few distillers in Kentucky, but hitting industrial chemicals hurts the entire American supply chain. It’s a much more surgical—and painful—approach.
The Greenland Friction and the Steel Problem
Right now, in mid-January 2026, things are getting weird again. There’s this sudden tension over Greenland—yes, Greenland—and it’s bleeding into trade. The U.S. has intensified its strategic interest there, and Denmark (an EU member) isn't exactly thrilled.
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Because of this, some voices in the European Parliament are calling to "revisit" the tariff exemptions granted to the U.S. last year.
Plus, there’s the "Steel and Aluminum" ghost that refuses to leave the room. While most goods are capped at 15% under the 2025 deal, steel is still being taxed at 50% by the U.S. under Section 232 "national security" grounds. Europe has responded by keeping its own europe tariffs on us steel and aluminum products high. It’s a stalemate that hasn't moved an inch in twelve months.
Real-World Impact: The 2026 Price Reality
If you're an American exporter, 2026 is a year of "wait and see." According to recent data from the PIIE, U.S. exports to the EU actually held steady in 2025 despite the rhetoric, mostly because companies "front-ran" the tariffs. They shipped everything they could before the June and July deadlines.
Now, that inventory is running low.
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Exporters of high-value U.S. medical equipment and non-electric motors are seeing their European clients look toward suppliers in the Mercosur bloc. Remember, the EU just cleared the way for a massive free-trade deal with Mercosur (Argentina, Brazil, Paraguay, Uruguay) on January 9, 2026.
This is the real danger for the U.S. Europe isn't just taxing American goods; they are actively replacing them with South American and Asian alternatives. If you're a farmer in the Midwest selling corn or soy, your European buyer just got a lot more interested in what's growing in Brazil.
What's Next?
The Supreme Court is expected to rule soon on the IEEPA-based tariff authority—basically, whether the U.S. President can legally slap these "reciprocal" tariffs on countries without Congress. If the court strikes it down, the whole EU-US deal might collapse.
If you are a business owner or an investor, here is what you actually need to do:
- Review your "Rules of Origin": Many companies are finding that if they move just 10% of their assembly to a "neutral" country, they can bypass the europe tariffs on us labels.
- Watch the Digital Services Tax (DST): This is the next flashpoint. The U.S. wants Europe to kill its "Big Tech" taxes. If Europe doesn't, expect the 15% tariff cap to vanish by summer.
- Hedge your Currency: Trade wars make the Euro and Dollar dance like crazy. Don't get caught on the wrong side of a 10% swing in the exchange rate on top of a 15% tariff.
The "Golden Age" of transatlantic trade is over. We’re in the "Art of the Deal" age now, where every shipment is a negotiation and every tax is a message. Stay sharp, because the rules you learned in 2024 don't apply anymore.
Actionable Insight: For U.S.-based SMEs exporting to Europe, the most critical move right now is auditing your Harmonized System (HS) codes. Minor classification changes can mean the difference between a 0% "Special MFN" rate and a 15% "Turnberry" penalty. Use a licensed customs broker to verify your status before your next Q1 shipment hits the docks in Rotterdam.