Trump intensifies trade war with threat of 30% tariffs on EU, Mexico
In an escalation of the trade war that has angered US allies and rattled investors, Trump announced the latest tariffs in separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum that were posted on his Truth Social media site on Saturday.
The EU and Mexico responded by calling the tariffs unfair and disruptive while pledging to continue to negotiate with the US for a broader trade deal before the deadline. The EU and Mexico are among the largest US trading partners.
Trump sent similar letters to 23 other trading partners this week, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20% up to 50%, as well as a 50% tariff on copper.
Trump said the 30% rate was "separate from all sectoral tariffs," which means 50% levies on steel and aluminum imports and a 25% tariff on auto imports would remain. The August 1 deadline gives the targeted countries time to negotiate agreements that could lower the threatened tariffs.
The spate of letters shows Trump has returned to the aggressive trade posture that he took in early April when he announced a slew of reciprocal tariffs against trading partners that sent markets tumbling before the White House delayed implementation.
'UNFAIR TREATMENT'
But with the stock market recently hitting record highs and the US economy remaining resilient, Trump is showing no signs of slowing down his trade war.
The US president promised to use the 90-day delay in April to strike dozens of new trade deals, but has only secured framework agreements with Britain, China and Vietnam. The EU has hoped to reach a comprehensive trade agreement with the US for the 27-country bloc.
Trump's letter to the EU included a demand that Europe drop its own tariffs, an apparent condition of any future deal.
"The European Union will allow complete, open Market Access to the United States, with no Tariff being charged to us, in an attempt to reduce the large Trade Deficit," he wrote. Von der Leyen said the 30% tariffs "would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic." She also said while the EU will continue to work towards a trade agreement, it "will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required."
Mexico's economy ministry said on Saturday it was informed the US would send a letter during a meeting on Friday with US officials. "We mentioned at the roundtable that it was unfair treatment and that we did not agree," the ministry's statement said.
RATE FOR MEXICO LOWER THAN CANADA
Mexico's proposed tariff level is lower than Canada's 35%, with both letters citing fentanyl flows even though government data shows the amount of the drug seized at the Mexican border was significantly higher than the Canadian border.
"Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough. Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground," Trump wrote.
Reuters
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