KEY POINTS
- Trump to impose 30% tariffs on imports from Mexico and the EU starting August 1.
- Canada also faces 35% tariffs; USMCA-exempt goods are spared.
- Trump has issued updated tariff letters to over 20 countries, including Japan and Brazil.
- US customs revenue from tariffs surpassed $100 billion by June.
- Mexico slams Trump’s latest threat of 30% tariffs as an “unfair deal”.
- Macron calls on the European Union to “resolutely defend European interests”.
- Germany calls for pragmatism in EU tariff negotiations with the US.
WASHINGTON: US President Donald Trump on Saturday said major US trading partners Mexico and the European Union would face a 30 percent tariff starting next month, ramping up pressure for deals in his trade wars.
Both sets of duties would take effect August 1, Trump said in separate letters posted to his Truth Social platform, citing Mexico’s role in illicit drugs flowing into the United States and a trade imbalance with the EU, respectively.
The duties are higher than the 25 percent levy Trump imposed on Mexican goods earlier this year, although products entering the United States under the US-Mexico-Canada Agreement are exempted.
Canada earlier received a similar letter setting out 35 percent tariffs on its goods.
The EU tariff is also markedly steeper than the 20 percent levy Trump unveiled in April, as negotiations with the bloc continue.
The EU, alongside dozens of other economies, had been set to see its US tariff level increase from a baseline of 10 percent on Wednesday, but Trump pushed back the deadline to August 1 just days before the elevated rates were due to take effect.
Mexico slams Trump’s 30pc tariffs
Mexico slammed Trump’s latest threat of 30 percent tariffs as an “unfair deal,” according to a government statement.
Mexico was informed of the new duties — which Trump said would come into effect by August 1 — during talks in the United States on Friday.
“We mentioned at the table that it was an unfair deal and that we did not agree,” the Mexican economy and foreign ministries said in a joint statement.
Mexico is already in negotiations seeking an alternative to tariffs that would protect businesses and jobs on both sides of the border, the ministries added, saying they hope to avoid the duties.
Mexico is one of the countries most vulnerable to the Republican leader’s tariffs, with 80 percent of its exports destined for the United States, its largest trading partner.
EU to ‘defend European interests’
French President Emmanuel Macron on Saturday condemned Trump’s threat to impose 30-percent tariffs on the European Union, calling on the bloc to “resolutely defend European interests”.
Expressing France’s “very strong disapproval” of the announcement, Macron called on the bloc to “step up the preparation of credible countermeasures by mobilising all instruments at its disposal” if the two sides failed to reach agreement by August 1.
“France fully supports the European Commission in the negotiation that will intensify to reach a mutually acceptable agreement by August 1, so that it reflects the respect that trade partners such as the European Union and the United States owe each other,” he wrote on social media.
Earlier Saturday, European Commission chief Ursula von der Leyen hit out at the new tariffs threatened by Trump, but said the EU still sought a deal to avert the measures.
Pressure on EU
Since the start of the week, Trump has sent out letters to more than 20 countries with updated tariffs for each.
Earlier this week, Trump issued new tariff announcements for a number of countries, including Japan, South Korea, Canada and Brazil, as well as a 50 percent tariff on copper.
The EU had hoped to reach a comprehensive trade agreement with the US for the 27-country bloc.
It had been bracing for the letter from Trump outlining his planned duties on the United States’ largest trade and investment partner after a broadening of his tariff war in recent days.
The EU initially hoped to strike a comprehensive trade agreement, including zero-for-zero tariffs on industrial goods, but months of difficult talks have led to the realisation that it will probably have to settle for an interim agreement and hope something better can still be negotiated.
The 27-country bloc is under conflicting pressures as powerhouse Germany urged a quick deal to safeguard its industry, while other EU members, such as France, have said EU negotiators should not cave into a one-sided deal on US terms.
Germany urges ‘pragmatic’ solution
Germany’s economy minister called for pragmatism in EU tariff negotiations with the US.
“The EU now must, in the time that remains, negotiate in a pragmatic manner a solution with the United States,” Germany’s economy minister Katherina Reiche said in a statement.
“A pragmatic outcome to these negotiations must be reached quickly,” she said.
Earlier, Germany’s main industrial body urged a quick resolution.
“President Trump’s announcement is a wake-up call for industry on both sides of the Atlantic,” said the Federation of German Industries (BDI) in a statement.
“A trade conflict between two economic areas as closely linked as the EU and the United States harms economic recovery, innovation strength, and ultimately confidence in international cooperation,” warned Wolfgang Niedermark, a senior BDI official.
The federation “calls on the German government, the European Commission, and the American administration to now very quickly find solutions and to avoid an escalation.”
The US is Germany’s largest trading partner.
With possible tariffs looming, German exports to the US fell by 7.7 percent in May to 12.1 billion euros ($14.2 billion), according to government data released last week.
The drop left German exports to the US at their lowest level since March 2022.
Tariffs on Canada, Mexico
Trump’s cascade of tariff orders since returning to the White House has begun generating tens of billions of dollars a month in new revenue for the US government.
US customs duties revenue shot past $100 billion in the federal fiscal year through June, according to US Treasury data on Friday.
Canada and the US are locked in trade negotiations, hoping to reach a deal by July 21, and the latest threat seems to put that deadline in jeopardy.
Canada, as well as Mexico, are trying to find ways to satisfy Trump so that the free trade deal uniting the three countries, known as the USMCA, can be put back on track.
The USMCA replaced the previous NAFTA accord in July 2020, after Trump successfully pushed for a renegotiation during his first term in office.
It was due to be reviewed by July of next year, but Trump accelerated the process by launching his trade wars after taking office in January.
Canadian and Mexican products were initially hard hit by 25 percent US tariffs, with a lower rate for Canadian energy.
Trump targeted both neighbours, saying they did not do enough on undocumented immigration and the flow of illicit drugs across borders.
But he eventually announced exemptions for goods entering his country under the USMCA, covering large swaths of products. Potash, used as fertiliser, got a lower rate as well.
