The European Union is awaiting a decision, expected Monday, on whether President Donald Trump will raise U.S. tariffs on European goods to as much as 50%. The White House imposed a 20% import tax in April but quickly scaled it back to 10% and put it on hold until 9 July to allow negotiations. Trump, citing the bloc’s trade surplus in goods, has warned he will escalate the levy if talks stall. EU officials say they prefer a negotiated settlement but are ready to retaliate with tariffs on hundreds of U.S. products ranging from beef and auto parts to beer and Boeing aircraft. U.S. Treasury Secretary Scott Bessent told CNN the discussions are making “very good progress,” although no breakthroughs have been announced. The stakes are high for what Brussels calls the world’s most important commercial relationship. Two-way trade in goods and services reached €1.7 trillion ($2 trillion) last year, or about €4.6 billion a day. While the EU ran a €198 billion surplus in goods, U.S. companies posted a €50 billion surplus in services, narrowing the overall deficit. Economists warn that higher duties could lift consumer prices in the United States and dent growth on both sides of the Atlantic. A Bruegel review estimates U.S. GDP would fall 0.7% and EU output 0.3% if tariffs settle in the 10%–25% range. Automakers such as Mercedes-Benz and consumer-goods producers including Campari and LVMH say they may face significant cost increases or shift more production to the United States if duties climb. The negotiations are complicated by long-standing U.S. complaints over EU food-safety rules, value-added taxes, and existing European levies on U.S. steel, aluminum and automobiles. Analysts expect the two sides may adopt a framework accord that leaves a 10% base tariff in place while further talks continue, but warn the path to even a limited deal could be “rocky.”