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Sky News AU
an hour ago
- Sky News AU
US President Donald Trump escalates trade war with massive 30 per cent tariff on European Union and Mexico
Three of America's largest trading partners will be hit with tariffs of more than 30 per cent after President Donald Trump announced the rates that will apply to the European Union and Mexico. President Trump posted copies of letters sent to the EU and Mexico on his Truth Social account on Sunday, revealing both would be hit with across 30 per cent tariffs. This came just one day after the US President announced Canada would be hit with a 35 per cent tariff. The new import duties, which come after weeks of trade negotiations, are set to take effect on August 1, although the letter stated the rates "could be changed, upwards or downwards". The new tariff rates risk sparking a major trade war, with some EU politicians already calling for the imposition of "countermeasures". European Commission Ursula 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." While stressing the EU still wanted to sign a trade agreement with the US, von der Leyen said the bloc of 27 countries was prepared to "safeguard EU interests". "The EU has consistently prioritised a negotiated solution with the U.S., reflecting our commitment to dialogue, stability, and a constructive transatlantic partnership," she said. "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." Mexican President Claudia Sheinbaum said she remained hopeful an agreement could be reached while stressing Mexico would not compromise its sovereignty. "I've always said that in these cases, what you have to do is keep a cool head to face any problem," Sheinbaum said "We're also clear on what we can work with the United States government on, and we're clear on what we can't. And there's something that's never negotiable: the sovereignty of our country." President Trump's trade letters warned against retaliation to the US announcement. "If for any reason you decide to increase your rates and react, the amount, whatever increase you choose, will be added to the 30% we charge," the letters state. When viewed as a trade bloc, EU countries rank as America's largest trading partner, while Canada and Mexico are top of the list of countries the US trades with most. The spate of letters sent out by the US President shows 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. The US President 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. And 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. Mexico's proposed tariff level is lower than Canada's 35%, with both letters citing fentanyl flows even though government data shows the amount of the drug seized at the Mexican border is 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. China is the main source of the chemicals used to make the opioid fentanyl. According to U.S. authorities, only 0.2% of all fentanyl seized in the U.S. comes from across the Canadian border, while the vast majority originates from the U.S.-Mexico border. The EU had initially hoped to strike a comprehensive trade agreement but more recently had scaled back its ambitions and shifted toward securing a broader framework deal similar to the one Britain brokered that leaves details to be negotiated. The 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 U.S. terms. Bernd Lange, the head of the European Parliament's trade committee, said Brussels should enact countermeasures as soon as Monday. "This is a slap in the face for the negotiations. This is no way to deal with a key trading partner," Lange told Reuters. 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 U.S. government. U.S. customs duties revenue topped $100 billion in the federal fiscal year through to June, according to U.S. Treasury data on Friday. The tariffs have also strained diplomatic relationships with some of the closest U.S. partners. Japanese Prime Minister Shigeru Ishiba said last week that Japan needed to lessen its dependence on the U.S. The fight over tariffs has also prompted Canada and some European allies to reexamine their security dependence on Washington, with some looking to purchase non-U.S. weapons systems. -With Reuters
Canberra Times
an hour ago
- Canberra Times
Trump intensifies trade war with threat of new tariffs
"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.
AU Financial Review
an hour ago
- AU Financial Review
US tariffs against EU, Mexico to begin on August 1
The Mexican government said it was informed during high-level talks with US State Department officials on Friday that a letter on tariffs from Trump was coming. The delegation told Trump officials at the meeting it disagreed with the decision and considered it 'unfair treatment', according to a Mexican government statement. 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 will reach 'better terms'. 'I've always said that in these cases, you need a cool head to face any problem,' Sheinbaum said. With the reciprocal tariffs, Trump is effectively blowing up the rules governing world trade. For decades, the United States and most other countries abided by tariff rates set through a series of complex negotiations known as the Uruguay round. Countries could set their own tariffs, but under the 'most favoured nation' approach, they couldn't charge one country more than they charged another. The Mexico tariff, if it goes into effect, could replace the 25 per cent tariffs on Mexican goods that do not comply with the existing US-Mexico-Canada free trade agreement. With Saturday's letters, Trump has now issued tariff conditions on 24 countries and the 27-member European Union. So far, the tally of trade deals struck by Trump stands at two – one with the United Kingdom and one with Vietnam. Trump has also announced the framework for a deal with China, the details of which remain fuzzy.
