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President Donald Trump has declared that a 30% tariff will be imposed on imports from the European Union and Mexico starting 1 August, escalating trade tensions with two of America’s key trading partners. In letters sent on Friday, Trump warned that retaliatory tariffs from either party would trigger even higher US import taxes in response.
The EU, the US’s largest trading partner, expressed hope earlier this week for a trade agreement before the 1 August deadline. However, no progress has been announced. In his letter to European Commission President Ursula von der Leyen, Trump criticised the EU’s trade policies, stating, “We must move away from these long-term, large, and persistent trade deficits, engendered by your tariff, and non-tariff, policies and trade barriers.” He described the trading relationship as “far from reciprocal.” The US trade deficit with the EU reached $235.6bn (£174bn) in 2024, according to the US Trade Representative’s office. Von der Leyen responded, affirming the EU’s commitment to “fair trading practices” and readiness to negotiate, but warned that “proportionate countermeasures” would be taken if necessary. Italian Prime Minister Giorgia Meloni expressed hope for a “fair agreement,” cautioning against a transatlantic trade war, while Dutch Prime Minister Dick Schoof called for EU unity to secure a “mutually beneficial” deal. Germany’s automotive industry voiced concerns over rising costs for carmakers and suppliers, lamenting the risk of further trade conflict. In a separate letter to Mexico’s leader, Trump accused the country of failing to curb North America’s role as a “Narco-Trafficking Playground,” stating that Mexico’s border security efforts were insufficient. Mexico called the tariff threat an “unfair deal.” Unlike Canada, where the White House exempted goods under the 2020 United States-Mexico-Canada Agreement, Trump’s letter did not clarify if Mexico’s agreement-bound goods would be spared. This week, Trump also proposed tariffs on Japan, South Korea, Canada, and Brazil, effective from 1 August, with Canada facing a 35% tariff. The administration has now outlined tariff plans for 24 countries and the EU. White House trade adviser Peter Navarro previously set a goal of securing “90 deals in 90 days,” with preliminary agreements announced with the UK and Vietnam. The tariff announcements come amid stalled trade talks and growing global concerns over escalating trade disputes. The EU and Mexico have until 1 August to negotiate or face the new import duties, with the risk of further economic fallout if retaliatory measures are enacted.
