U.S. plays hardball on tariffs deadline as EU battles for a deal

The U.S. has signaled it will not let up on its Aug. 1 deadline for higher tariffs on the European Union as the bloc fights to strike a deal in time.

Over the weekend, U.S. Commerce Secretary Howard Lutnick said he was confident a trade deal could be struck with the European Union, but warned that the deadline for a baseline 30% tariff is fixed.

He did signal that talks could continue after this date, however, noting: "These are the two biggest trading partners in the world, talking to each other. We'll get a deal done. I am confident we'll get a deal done."

The EU has said it is preparing retaliatory measures against the U.S. if punitive trade tariffs are imposed. Lutnick dismissed the possibility of the EU targeting items like Boeing airplanes and Kentucky bourbon, however, saying, "they're just not going to do that."

One EU official told CNBC that there has been a clear shift in mood regarding the bloc's potential response among all EU member states, except Hungary, whose leader, Viktor Orban, is a Trump ally.

The bloc's potential countermeasures against the U.S. include levies on imports from the U.S. worth 21 billion euros, which are currently on pause until Aug. 6. The European Commission has also prepared a second round of potential tariffs targeting trade worth 72 billion euros.

Meanwhile, the Wall Street Journal and Bloomberg reported that an increasing number of EU member states have signalled their support for the bloc deploying its anti-coercion instrument. This is the EU's most powerful trade tool, which would give the European Commission broad powers to take retaliatory action against the U.S.