The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Neil Unmack

LONDON, July 14 (Reuters Breakingviews) - Ursula von der Leyen is back playing high-stakes poker. Last week, the European Commission president had seemed close to a mutually acceptable trade deal with the United States. U.S. President Donald Trump’s threat of 30% tariffs from August changes that, and necessitates a response.

If Trump’s 30% threat became real, it would clobber 532 billion euros of Europe’s goods exports across the Atlantic. Goldman Sachs analysts estimate the move could raise the total tariff rate the U.S. applies to European products by 26 percentage points versus before the trade war began. That could lop 1.2% off the bloc’s output through 2026.

Brussels could try to de-escalate, by continuing to negotiate in good faith while threatening the level of tariffs it already put on the table. That includes 21 billion euros of levies to counter U.S. steel levies, and a further slug in response to the “reciprocal tariffs.”

It helps that Europe has strength in numbers. Trump has so far agreed just three trade deals after his April 2 Liberation Day tariff onslaught, with Britain, Vietnam and China. If he failed to do any more agreements and his remaining trading partners hiked their tariffs simultaneously, it would imperil the U.S.’s roughly $2 trillion of goods exports. The risk is that Trump’s promised deals with non-EU states materialise and Brussels is left high and dry.

The other alternative is to threaten China-style tit-for-tat levies by pledging a 30% rate on U.S. goods. The Chinese precedent, which saw Beijing and Washington settle on lower tariffs after a period of mutual retaliation, suggests such a strategy can work.

Yet that looks harder for Brussels. It would vastly increase the cost of Europe’s 335 billion euros of imports from the U.S., including key products like fuels and drugs, and completely sever all exports to Washington. China also has a stronger hand: Beijing could restrict the flow of critical rare earths to the U.S., and it does not have to worry about reconciling the interests of 27 countries. Europe cannot afford to completely fall out with Trump, who still provides critical aid to Ukraine against Russia.

Yet Europe does have cards it can play. It can threaten to target the 483 billion euros of services the U.S. exports to the EU. Von der Leyen could revive her talk in April of a levy on the advertising revenue of U.S. big tech groups like Meta Platforms META.O or Google-owner Alphabet GOOGL.O, or publicly muse about digital services taxes. EU leaders can also start talking more frequently about the Anti-Coercion Instrument that allows the EU to implement intellectual property restrictions. Such a response could be phased in over time, to reduce the immediate risk of tit-for-tat retaliation.

Given the vast U.S. services surplus, Trump is not immune to pressure. The high weighting of U.S. tech companies in domestic indices means currently becalmed stock markets might slump. Europe has no easy options in its U.S. poker, but the least-bad one is to judiciously show it has at least some cards.

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CONTEXT NEWS

U.S. President Donald Trump on July 11 threatened to impose a 30% tariff on all EU exports to America, and warned he would raise levies further if the European Commission retaliated.

In a letter to European Commission President Ursula von der Leyen, Trump said that the 30% rate would apply from August 1 and would be “separate from all Sectoral Tariffs”, implying that rates could be different or higher on specific goods such as steel, autos and pharmaceuticals. He also said that any extra EU levies would “be added on to the 30% that we charge.”

The European Commission on July 12 suspended tariffs on 21 billion euros of goods that were due to come into effect on July 15, until early August.

“We have always been clear that we prefer a negotiated settlement with the US,” von der Leyen said in a statement. “That remains the case.”

(Editing by George Hay; Production by Streisand Neto)

((For previous columns by the author, Reuters customers can click on UNMACK/neil.unmack@thomsonreuters.com))