President Donald Trump has threatened to impose a 30 per cent tariff on imports from Mexico and the European Union starting on August 1, after weeks of negotiations with the key US allies and top trading partners failed to reach a comprehensive trade deal.
In an escalation of Trump’s trade war, the fresh tariffs were announced in separate letters to European Commission President Ursula von der Leyen and Mexico’s President Claudia Sheinbaum posted on Truth Social on Saturday.
The European Union and Mexico are among the largest US trading partners.
Trump has sent similar letters to 23 other US trading partners this week, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20 per cent up to 50 per cent, as well as a 50 per cent tariff on copper.
The August 1 deadline gives countries targeted by Trump’s letters time to negotiate a trade deal that could lower the threatened tariff levels.
The EU had hoped to reach a comprehensive trade agreement with the US for the 27-country bloc.
Three EU officials told Reuters on Saturday that Trump’s threats represent a negotiating tactic.
Trump’s letter to the EU included a demand that Europe drop its own tariffs, an apparent condition of any future deal.
“The European Union will allow complete, open Market Access to the United States, with no Tariff being charged to us, in an attempt to reduce the large Trade Deficit,” Trump wrote.
EU President von der Leyen said the 30 per cent tariffs “would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic.”
She also said while the EU will continue to work towards a trade agreement, they “will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”
Canada got a higher tariff rate of 35 per cent compared to Mexico, with both letters citing fentanyl flows, even though government data shows the amount of the drug seised at the Mexican border was significantly higher than the Canadian border.
“Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough. Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground,” Trump wrote.
Mexico sends more than 80 per cent of its total exported goods to the US and free trade with its northern neighbour drove Mexico to overtake China as the US’s top trading partner in 2023.
The European Union had been bracing for the letter from Trump outlining his planned duties on the United States’ largest trade and investment partner after a broadening of his tariff war in recent days.
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.
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 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 $US100 billion ($A152 billion) in the federal fiscal year through to June, according to US Treasury data on Friday.
Spokespeople for Mexican President Claudia Sheinbaum and Mexico’s Economy Ministry did not immediately respond to requests for comment.
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