Trump announces 30% tariffs on EU and Mexico

EU officials say announcement could be yet another negotiating tactic

US President Donald Trump on Saturday announced a 30% tariff on imports from Mexico and the European Union starting on Aug 1 after weeks of negotiations with the key trading allies failed to reach a more comprehensive trade deal.

The fresh tariffs were announced in separate letters posted on Trump’s Truth Social site on Saturday.

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% tariff on copper.

But given the number of times Trump has changed his mind about major issues, there is still uncertainty about how the tariff drama will end.

Three EU officials, speaking on condition of anonymity, told Reuters they believed the president’s latest announcement is just another negotiating tactic.

Trump initially announced a 20% tariff on imports from the EU in his “Liberation Day” event in early April before lowering it to 10% as part of a 90-day negotiating pause. But he quickly grew frustrated and threatened a 50% rate, spurring more talks.

The EU had hoped to reach a comprehensive trade agreement with Washington for the 27-country bloc.

Ursula Von Der Leyen, President of the European Commission, issued a statement expressing her disappointment and did not rule out retaliation.

“Imposing 30 percent tariffs on EU exports would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic,” she said.

“The EU has consistently prioritised a negotiated solution with the US, reflecting our commitment to dialogue, stability and a constructive transatlantic partnership.

“We remain ready to continue working towards an agreement by August 1. At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”

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 it will probably have to settle for an interim agreement and hope something better can still be negotiated.

Internal disagreements

The 27-country bloc is under conflicting pressures as powerhouse Germany urged a quick deal to safeguard its industry, while other members, such as France, have said EU negotiators should not cave into a one-sided deal on US terms.

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 to June, according to US Treasury data on Friday.

The EU tariff rates would apply widely, though separate from the president’s sectoral tariffs on products such as automobiles and steel.

If implemented, the rates could place the EU at a competitive disadvantage on American exports to the neighbouring UK, which left the bloc in 2020 and was the first country to come to a top-line trade pact with Trump.

Fentanyl fight

In his letter to Mexican President Claudia Sheinbaum, Trump said the country has been “helping me secure the border”, but added that it wasn’t enough.

Trump added that if Mexico “is successful in challenging the Cartels and stopping the flow of Fentanyl”, the US would consider adjusting the levies.

“These Tariffs may be modified, upward or downward, depending on our relationship with your Country,” he added.

The letter is silent on whether the US will preserve a carve-out for goods traded under the USMCA trade deal, which have been exempt from the current 25% rate. The Trump administration has previously said it would keep the exemption for ^Canada, which is now facing a 35% tariff on non-exempt goods.

Mexico is the third country to get a letter that wasn’t actually facing a tariff hike on the now-extended July 9 deadline, following Canada and Brazil.