Trump Intensifies Trade War with Threat of 30% Tariffs on European Union, Mexico

• President Donald Trump on Saturday, July 12, 2025, threatened to impose a 30% tariff on imports from Mexico and the European Union (EU) starting on August 1, 2025, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal.
• In an escalation of a trade war that has angered U.S. 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, both among the largest U.S. trading partners responded by calling the tariffs unfair and disruptive while pledging to continue to negotiate with the U.S. for a broader trade deal before the deadline.
• Trump sent similar letters to 23 other trading partners last week, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20% up to 50%, as well as a 50% tariff on copper. The U.S. president said the 30% rate was "separate from all sectoral tariffs," indicating 50% levies on steel and aluminium 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.
• While some investors and economists have noted Trump's pattern of backing off his tariff threats, the spate of letters showed Trump has returned to the aggressive trade posture that he took in April when he announced a slew of reciprocal tariffs against trading partners that sent markets tumbling before the White House delayed implementation. But with the stock market recently hitting record highs and the U.S. economy still resilient, Trump is showing no signs of slowing down his trade war. He 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.
• Trump's letter to the EU included a demand that Europe drop its own tariffs. 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." The EU had been scheduled to impose “countermeasures” starting Monday, July 14, 2025, at midnight Brussels time (6 p.m. EDT), however, the retaliatory tariffs have been suspended in hopes of reaching a trade deal with the Trump administration by the end of the month.

(Source: Reuters & Global News)