United States President Donald Trump has imposed a 30 percent tariff on imports from Mexico and the European Union starting on August 1, weeks after negotiations with the major trading partners failed to reach a more comprehensive trade deal.
Trump announced the new tariffs on two of the US’s biggest trade partners in separate letters posted to his Truth Social platform on Saturday.
He said they were due to what he called Mexico’s role in undocumented migration and illicit drugs flowing into the US, as well as a trade imbalance with the EU, respectively.
Earlier this week, Trump issued new tariff announcements for more than 20 countries, including Japan, South Korea, Canada and Brazil, as well as a 50 percent tariff on copper.
The duties are higher than the 25 percent levy Trump imposed on Mexican goods earlier this year, although products entering the US under the US-Mexico-Canada Agreement are exempted.
The EU tariff is also markedly steeper than the 20 percent tax Trump unveiled in April.
In response, European Commission President Ursula von der Leyen said the EU was prepared to take the necessary steps to safeguard its interests, “including the adoption of proportionate countermeasures if required”.
Von der Leyen said in a statement that the bloc remained ready “to continue working towards an agreement by August 1”.
French President Emmanuel Macron called on the EU to “resolutely defend European interests”, saying it should “step up the preparation of credible countermeasures by mobilising all instruments at its disposal, including anti-coercion” if the two sides failed to reach an agreement.
The EU’s Anti-Coercion Instrument allows the bloc to retaliate against third countries that put economic pressure on EU members to change their policies. Its measures include limitations on access to public procurement tenders.
Three other EU officials told the Reuters news agency that Trump’s tariff threat is a negotiating tactic.
EU states, alongside dozens of other economies, had been set to see their US tariff level increase from a baseline of 10 percent on Wednesday, but Trump pushed back the deadline just days before the elevated rates were due to take effect to August 1.
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 that only benefits the US.
The Mexican government, meanwhile, said it was informed during high-level talks with US State Department officials on Friday that the Trump letter was coming. The delegation told Trump officials at the meeting that it disagreed with the decision and considered it “unfair treatment”, according to a Mexican government statement.
Mexico’s president, Claudia Sheinbaum, who has sought to avoid directly criticising Trump in the early going of her presidency, expressed a measure of confidence during a public appearance on Saturday that the US and Mexico would reach “better terms”.
“I’ve always said that in these cases, you need a cool head to face any problem,” Sheinbaum said.
Mexico is one of the countries most vulnerable to the US leader’s tariffs, with 80 percent of its exports destined for its northern neighbour.
Canada has also received a similar letter from Trump, which set 35 percent tariffs on its goods.
Trump has also threatened to impose a 50 percent tariff on goods made in Brazil, in retaliation for what he called the “witch-hunt” trial against his far-right ally, former President Jair Bolsonaro, who is facing prosecution over his alleged role in a plot to overturn the country’s 2022 election.
Reporting from Washington, DC, Al Jazeera’s Mike Hanna said that there is confusion about Trump’s motives.
“In the case of Brazil… that was in response to what President Trump described as the bad treatment of Bolsonaro by the current sitting government,” Hanna said.
“So the question is, are these tariffs based on trade details, or are these used as punishment? Perhaps a mixture of both. But the markets have not reacted as strongly as they did in the past. Traders are betting on the fact that these tariffs may not go ahead.”
Trump’s cascade of tariff orders since returning to the White House in January has begun generating tens of billions of dollars a month in new revenue for the US government. US customs duties revenues shot past $100bn in the federal fiscal year to June, according to US Treasury data on Friday.
But the global economy and markets have been on a rollercoaster that seems set to continue for the foreseeable future.
Critics have also warned that the levies could transfer costs to US consumers and fuel economic uncertainty and inflation.
