European corporate giants, from German automaker Mercedes-Benz Group AG to French luxury conglomerate LVMH Moët Hennessy Louis Vuitton SE, are ramping up pressure on the European Union (EU) to resist U.S. President Donald Trump’s threats of tariffs. In an effort to prevent a transatlantic trade war between the U.S. and the EU, some executives have engaged in behind-the-scenes meetings with American officials to pursue their own interests.
Initiatives have included lobbying European governments and Brussels for a swift agreement and removing iconic American products—such as bourbon—from a list of goods targeted in retaliation to ease potential escalation, according to sources familiar with the matter.
Motivated by concerns over financial results and competitive disadvantages, European companies are increasingly applying both public and private pressure as the July 9, 2025 deadline approaches to avoid 50% tariffs on nearly all U.S. imports from the EU.
If a deal proves unsatisfactory, the European Commission—the executive arm of the EU—has proposed tariffs on about €95 billion worth of U.S. exports to Europe in response to duties on cars and metals. Requests from member states and industry would reduce that list by €70 billion, Bloomberg reported. The Commission pushed back due to fears that the package would be weakened, sources added.
“We’re absolutely focused on a positive outcome,” said Maroš Šefčovič, the bloc’s head of trade, telling reporters in Brussels on Monday, July 1, 2025. He traveled to Washington for the final round of talks today (July 3, 2025).
The EU is now willing to accept a trade deal including a general 10% tariff on many of its exports, although it wants the U.S. to commit to lower rates in key sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft.
In recent weeks, the EU has softened its provocative tone. At the heart of the corporate reaction are the lucrative trade ties European firms cannot afford to abandon. Automakers and medical equipment companies benefit from higher prices and wider profit margins in the U.S., while also relying on Silicon Valley software and U.S.-made components like superconducting magnets and X-ray tubes.
Top U.S. universities also fuel European ambitions in electric vehicles, medical artificial intelligence, and biotechnology. This combination makes many corporate leaders cautious toward a strong EU response.
“There is a perception that punishing U.S. exporters would help European industry. It’s just not true,” said Oliver Bisazza, CEO of the lobbying group MedTech Europe, representing companies like Philips NV, Bayer AG, and Siemens Healthineers AG. “If the EU retaliates, the sector gets hit twice and the cost of producing medical devices increases.”
Negotiations between Brussels and Washington have been ongoing since May, with tensions running high. Trump has blasted current trade arrangements as “completely unacceptable” and called the EU “worse than China.” While European Commission President Ursula von der Leyen has warned that “all options” are on the table, her position has been undermined by companies working to weaken the bloc’s negotiating stance.
EU officials say some of the most disruptive maneuvers come from Germany’s auto industry. Mercedes, BMW, and Volkswagen have submitted their own proposals in discussions with U.S. officials. CEOs and other top executives from all three manufacturers traveled to Washington for closed-door meetings with Trump allies, including Commerce Secretary Howard Lutnick. Despite offering peace gestures, they have made little progress.
BMW announced new investments in the U.S., Mercedes moved production of its SUV GLC—among the brand’s most successful models—to Alabama, and Sweden’s Volvo Cars AB committed to expanding production in the U.S. European officials worry companies could entice suppliers to shift some investments and production across the Atlantic as well.
Similarly, a series of European pharmaceutical companies, including France’s Sanofi, have pledged to spend billions on drug development and manufacturing in the U.S. Industry groups representing producers of French cognac and Irish whiskey have also intensified lobbying efforts, warning that retaliatory tariffs would hurt a sector where the U.S. and China represent over 80% of exports.
Trade unions in Paris and Dublin have circulated position papers urging Brussels to de-escalate, arguing that spirits have become political hostages in a dispute largely unrelated to their industries.
For European boards, time is tight. During Trump’s first term, strong growth in China and the EU made the U.S. slightly less critical, and there was no war in Ukraine. But now, domestic demand is weak, competition from China intensifies, and the loss of cheap Russian energy adds costs.
“There is already a measurable decline in direct investment and specific losses in wealth,” said David Deissner, CEO of the German advocacy group Foundation for Family Businesses and Politics, at a press conference in Berlin this week. “Tariff measures are already acting as a trade barrier.”
As part of its broader strategy, the EU is working to improve the bloc’s internal market and rushing to finalize trade agreements worldwide to offer companies opportunities to diversify away from the U.S.
For Brussels, the stakes are high. Collective negotiation is a central element of the EU’s power. That unity was maintained during Brexit but could now erode as talks reach their conclusion.
“To optimize the EU’s interest, the Commission must really take the lead,” said Michael Plummer, professor of international economics at SAIS Europe campus of Johns Hopkins University in Bologna.
A weak outcome with Washington could spill over into other disputes, particularly with China, on issues such as subsidies for electric vehicles, solar panels, and access to clean technologies—and harm prospects for key industries and investments.
Alongside business pressures, German Chancellor Friedrich Merz criticized the Commission’s approach to trade talks as overly complex and called for greater focus on core sectors such as automobiles, pharmaceuticals, chemicals, and machinery—the largest manufacturing sectors in Germany.
In this context, powerful voices urge restraint. LVMH Chairman Bernard Arnault warned that failure to reach an agreement could be devastating for the French wine and spirits industry and called for compromise rather than confrontation, even proposing a free trade zone between the EU and the U.S.
The billionaire, who has known Trump since the 1980s, has personally gotten involved and visited Washington at least twice since Trump’s inauguration, while his son Alexandre met with officials alone in May.
“I hope to succeed, with my modest means and contacts, in convincing Europe to adopt the most constructive possible stance,” Arnault told French lawmakers in May.