US President Donald Trump announced that he is preparing to impose 30% tariffs on imports from the European Union and Mexico as of August 1.
The announcement came after weeks of failed trade agreement negotiations. Trump announced the new tariffs in letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, as well as on the social media platform Truth Social.
The European Union and Mexico are among the US's largest trading partners. Trump's move marks a new phase in a trade war that could have global ramifications. Trump, who sent similar letters to 23 other countries this week, including Canada, Japan, and Brazil, set general tariff rates between 20% and 50%. A special 50% tax on copper imports is reportedly planned.
Trump's tariffs will take effect if no new trade agreements are reached with the target countries. The president's letter to the European Union stated that the EU's removal of its own tariffs is a precondition for any potential agreement with the US. “The European Union will provide full and open market access to the US in an effort to reduce its large trade deficit,” he said.
European Commission President von der Leyen stated that Trump's tariffs “will cause serious disruptions to transatlantic supply chains,” adding that the EU will implement retaliatory measures if necessary to protect its interests. Germany favors a swift agreement, while some members, such as France, believe that “the conditions dictated by the US should not be bowed to.”
The letter sent to Mexico emphasized that cartel activity had not been stopped despite the country's contributions to border security. Trump said, “Mexico helps me with border security, but it's not enough.” More than 80% of Mexico's exports go to the US, and by 2023, the country had surpassed China to become the US's largest trading partner.
*This is not investment advice.
