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.
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.
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.
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.
