Trump gives EU until 4 July to implement trade deal or face 'much higher' tariffs

The European Union has until 4 July to fully implement its trade deal with the United States or face "much higher tariffs", US President Donald Trump said on Thursday after a phone call with European Commission President Ursula von der Leyen.

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, 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 towards a possible resolution on 19 May.

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.

Earlier this week, Ursula von der Leyen hit back at Trump.

"A deal is a deal, and we have a deal. And the essence of this deal is prosperity, common rules and reliability," von der Leyen said in Armenia.

"We want from this work (to achieve) mutual gain, cooperation and reliability. And we're prepared for every scenario," she added, hinting at potential retaliation.

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

"We discussed many topics, including that 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.

Most officials and diplomats in Brussels did not expect the 25% tariff to materialise, given Trump's track record of issuing threats and then changing his mind.