- The US president is dangerously raising the tone in negotiations with two of the US’s largest trading partners, threatening serious turmoil for the global economy.
Donald Trump is opening a frontal conflict with the European Union and Mexico, announcing the imposition of tariffs of 30% from August 1, a move that escalates the already tense trade relations of the United States with its main partners.
The US president, through official letters published on the Truth Social platform, argued that the measures are deemed necessary due to “Mexico’s insufficient contribution to the fight against drug trafficking” and the “prolonged imbalance in the trade balance with the EU”.
The announcement sparked an immediate backlash in Brussels, with European Commission President Ursula von der Leyen speaking of serious disruptions to transatlantic supply chains and saying the EU was ready to adopt “proportionate countermeasures” if necessary.
Despite the tough rhetoric, the EU appears willing to continue talks with the aim of reaching an agreement before the crucial date. “We remain committed to the negotiations, but we will protect the interests of the Union,” von der Leyen said.
From Mexico’s perspective, the new escalation comes as a surprise, as an exemption for goods traded under the USMCA (United States–Mexico–Canada) agreement had previously been agreed upon. However, Trump, in a letter to Mexican President Claudia Sheinbaum, made it clear that “Mexico’s assistance for border security is not sufficient” and that “as of August 1, 30% tariffs will be imposed on Mexican products”.
The EU had already avoided additional tariffs of 20% in April, but now faces the possibility of a 30% burden, at a time when the fronts remain open on many international fronts. The Commission already has a retaliatory package worth 21 billion euros ready, which had been temporarily “frozen” until July 14, without it being clarified yet whether there will be a new suspension.
The US, under the presidency of Trump since January, has resumed an aggressive trade strategy, imposing extensive tariffs on friendly and competitive countries. Although new trade agreements were announced, only two have been signed so far: with the United Kingdom and Vietnam, while talks with China are continuing to reduce reciprocal tariffs.
Since the beginning of the week, Washington has sent new letters to more than 20 countries with updated tariffs, including 35% for Canada, which also maintains an exemption under the USMCA.
Economist Josh Lipsky, president of the Atlantic Council for international economics, called the new move “one of the most dangerous moments of the trade war.” As he notes, “despite the mobility in the negotiations, the EU is in the same zone of uncertainty as almost every other country in the world.”
The possibility of an overall deterioration in trade relations with Europe and Mexico is increasing fears of a slowdown in the global economy. Stock markets were jittery after the announcement, with analysts speculating that Trump’s tariff policy may be aimed at bolstering his negotiating position as he seeks to hammer out more deals.
Whether there will be a compromise or a full-blown trade war with both partners will be decided over the next three weeks, in a climate increasingly reminiscent of the tensions of 2018-2020.
