Trump says 25% tariffs on EU will be announced soon

U.S. President Donald Trump stated his intention to impose a 25% tariff on goods manufactured in the European Union, claiming the EU was formed to "take advantage of the United States." This statement from President Trump has once again sparked concerns about global trade tensions, potentially disrupting established trade agreements.

Speaking to reporters during an event with his cabinet members, Trump said, "We're going to be announcing something soon. Generally speaking, it's going to be 25%, the tariffs, it's going to be on cars and everything else." The EU responded swiftly, stating that it would "react firmly and immediately to such unjustified tariffs" if they were implemented, signaling a potential trade war.

Trump's remarks raised questions about his trade plans, as he also seemed to suggest that the planned tariffs on imports from Mexico and Canada, originally scheduled to take effect on March 4th, might be delayed again. However, a government official later stated that the deadline remained in effect and that the president planned to review Mexico and Canada's actions on border security in the coming days, emphasizing the importance of border control.

Trump made it clear on Wednesday that trade with Europe remains a key focus, reiterating his criticism of European policies that he claims disadvantage American food and automobile exporters. He asserted, "The EU was formed to take advantage of the United States — that's what it was formed for, and they've done a good job. But now I'm president," indicating his determination to address the perceived imbalance.

The EU has refuted the president's claims, arguing that the creation of the regional market has made it easier for American companies to do business in Europe. A spokesperson for the European Commission stated, "It's a boon for the United States. We are ready to cooperate if you play by the rules. But we will also be ready to protect our consumers and our businesses. They expect no less from us," highlighting the EU's commitment to fair trade practices.

A tariff is a tax levied on imported goods, collected by the government and paid by the company importing the goods. Trump has vowed to use tariffs to boost American manufacturing, raise revenue, and push other countries to change policies he opposes. Since taking office, he has increased tariffs on goods from China by 10% and taken steps to impose tariffs on other imports, including directing his staff to develop recommendations for customized "reciprocal" tariffs for each country.

However, he has also suspended some planned tariffs, leading many businesses and analysts to speculate about whether he is prepared to follow through on his threats. Tobin Marcus, head of U.S. policy and politics at Wolfe Research, stated, "The 25% threat he floated today is consistent with the upper end of the range he's signaled previously. That number is concerning — certainly should be concerning for the transatlantic trade relationship, but not entirely out of left field," suggesting a cautious but wary outlook on the situation.

Earlier this month, he ordered 25% tariffs on goods from Mexico and Canada, two of the United States' largest trading partners. But he suspended those tariffs until March 4th, before they took effect, in order to negotiate over border security issues. On Monday, Trump said he expected the 25% tariffs on goods from Mexico and Canada to take effect "as scheduled," emphasizing the importance of the negotiations.

During Wednesday's meeting, when asked about the latest developments, he said the 25% tariffs on Mexico and Canada would take effect on April 2nd. This is also the day the Commerce Department is supposed to submit its broader "reciprocal" tariff recommendations. Commerce Secretary Howard Lutnick told reporters that "overall, it's April 2nd," distinguishing the tariffs related to concerns about drug smuggling and immigration from Mexico and Canada.

The Dow Jones Industrial Average, S&P 500, and Nasdaq all traded lower in midday trading, while the peso and Canadian dollar rose, reflecting the market's reaction to the uncertainty surrounding the trade policies.