President Donald Trump has threatened to impose 30% tariffs on products from the European Union and Mexico, escalating his renewed trade campaign since returning to office in January.
This move is part of a broader effort to correct what Trump sees as imbalanced trade relationships, particularly with the EU, which he says maintains one of the largest trade deficits with the U.S. In a letter to European Commission President Ursula von der Leyen, Trump emphasized his demand for “more balanced and fair TRADE.”
EU and Mexico Brace for Tariffs as Trump Unleashes Unpredictable Trade Measures
Since the start of the year, Trump has issued a confusing and unpredictable series of tariff changes—raising, pausing, and adjusting rates on various countries. Starting August 1, the EU and Mexico will join others whose exports to the U.S. will face new or updated duties, some reaching up to 40%.
The letters Trump sent stated that the 30% tariff applies broadly, excluding some sector-specific tariffs like the existing 25% auto duty.
Trump Threatens 30 Percent Tariffs on EU and Mexico as Trade Tensions EscalateEuropean leaders have condemned the new tariffs and signaled they are ready to retaliate. Ursula von der Leyen warned the tariffs could damage supply chains and consumer interests on both sides of the Atlantic and pledged to defend EU interests with proportional countermeasures.
French President Emmanuel Macron echoed these sentiments, calling for swift preparation of credible responses, including anti-coercion measures. The EU has prepared two lists of U.S. products for potential retaliation, covering over $24 billion in trade.
Tariff Threats Intensify as U.S. Pressures Mexico Over Border and Drug Concerns
Mexico, which enjoys largely duty-free trade with the U.S. under the USMCA, now faces renewed threats of tariffs. Trump has linked the tariffs to his ongoing concerns about the flow of fentanyl into the U.S., suggesting that Mexico’s border cooperation has been insufficient.
Mexican officials, including President Claudia Sheinbaum and Economy Minister Marcelo Ebrard, criticized the proposed tariffs as unfair but expressed hope that negotiations could produce a more favorable solution for both countries.
Trump warned that any retaliatory tariffs would trigger equal or higher U.S. responses, potentially increasing the 30% base rate. He cited not only tariffs but also non-tariff barriers—particularly European digital service taxes—as justification.
These taxes affect U.S. tech firms by targeting revenues from services such as advertising, subscriptions, and data sales, even if the firms are unprofitable. The administration accuses the EU of failing to negotiate in good faith and previously considered a 50% tariff in frustration with slow progress.
Trump’s aggressive tariff stance has rattled global trade partners, as even close allies like Canada have faced threats—most recently a proposed 35% tariff on certain goods. While the United Kingdom has managed to reach an early trade deal, tensions remain high with the EU and Mexico.
As of 2024, the EU is the U.S.’s largest trading partner with nearly $976 billion in two-way trade, followed by Mexico at $840 billion and Canada at $762 billion. The world is watching closely as the August 1 deadline approaches.
