Donald Trump threatened on Saturday to impose a new 30% tariff on many imported products from the EU and Mexico starting August 1st. For the EU, this new tariff would come in addition to the existing 25% levy on imported cars (plus the prior 2.5%) and the 50% tariffs on aluminium and steel.
The announcement targeting the EU and Mexico—along with countries such as Canada and Brazil (which he threatened with 35% and 50% tariffs respectively)—came just days after the expiration of a 90-day pause on earlier tariffs, which he had imposed on dozens of countries on April 5, including a 20% tariff on the EU.
If implemented, the new tariff is expected to further hinder the EU’s economic growth and hit sectors such as luxury goods, chemicals, and pharmaceuticals.
The U.S. president also warned that if any trading partner retaliates with their own tariffs on U.S. goods, he will raise tariffs even further, beyond 30%. In response, the European Commission yesterday temporarily froze its planned countermeasures on aluminium and steel tariffs, which were scheduled to take effect tomorrow.
EU member states appear divided over how to approach negotiations over the new tariff. French President Emmanuel Macron has urged the EU to accelerate preparations for retaliation, while German Chancellor Friedrich Merz stated that Europe must remain “pragmatic.”
If the new tariff goes into effect, it is expected to further slow the EU’s economic growth and disproportionately affect Northern European countries as well as industries such as luxury goods, chemicals, and pharmaceuticals.
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