Trump Raises EU Tariff Threat, Plans Canada and Mexico Calls
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US President Donald Trump ramped up his tariff threats to the European Union while saying he would speak with the leaders of Canada and Mexico, as stock markets sank following a hectic weekend that saw prospects for a trade war turn into reality.
In remarks to reporters on Sunday night, Trump said he would hold separate calls on Monday morning with Canadian Prime Minister Justin Trudeau, as well as with the Mexican leadership, after announcing 25% tariffs on the US’s neighbors and top trading partners. The levies are set to take effect on Tuesday, barring a last-minute deal.
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“I don’t expect anything very dramatic,” Trump said of the planned calls. “We put tariffs on. They owe us a lot of money, and I’m sure they’re going to pay.”
Trump also reiterated a warning to the European Union that tariffs “will definitely happen,” citing a large trade deficit with the bloc.
“They don’t take our cars, they don’t take our farm products,” Trump said of the EU. “They take almost nothing, and we take everything, and then millions of cars, tremendous amounts of food and farm products.”
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Trump’s comments leave little room for optimism of an agreement to avoid a North American trade war that may spread across the world. US stock futures and Asian shares declined, the peso fell to its lowest level against the dollar in almost three years and the Canadian dollar sank to its weakest since 2003. The euro dropped on Trump’s renewed threats while the dollar rose.
Both Canada and Mexico have pledged to retaliate if Trump follows through on his threats. Mexican President Claudia Sheinbaum said she’ll detail her plans early Monday, while Trudeau has pledged 25% retaliatory tariffs on $106 billion worth of US goods. China, which is also due to be hit with a 10% levy, has vowed “corresponding countermeasures” though hasn’t detailed them yet. The nation is currently near the tail end of a weeklong holiday for Lunar New Year.
Trump has said he may escalate US tariffs further in response to any retaliations.
‘Out of Line’
“They have to balance out their trade, No. 1,” Trump said when asked what the countries need to do to have the tariffs lifted. “They’ve got to stop people from pouring into our country. They have to stop people from pouring in and we have to stop fentanyl, and that includes China.”
Trump did appear to spare at least one major trading partner — the UK — from the threat of immediate action, saying the relationship was “out of line,” but “can be worked out.” The US president said he was “getting along very well” with UK Prime Minister Keir Starmer, whom he described as “very nice” in contrast with recent attacks leveled on the British leader by billionaire Trump ally Elon Musk.
“So, the UK is way out of line, and we’ll see, the UK, but European Union is really out of line,” Trump told reporters. “UK is out of line, but I’m sure that one, I think that one can be worked out. But the European Union is, it’s an atrocity.”
While Starmer may welcome such optimism from Trump, the comments complicate his attempts to reset relations with Brussels in the wake of Brexit, an effort he was hoping to advance by attending a defense summit with European leaders on Monday.
‘Pretty Soon’
Trump has threatened EU tariffs before, including as recently as Friday when he said he’d “absolutely” apply them. The EU in turn has said it would “respond firmly” if Trump imposes tariffs.
Trump didn’t specify a level or timeline for the EU actions in his latest comments Sunday. “I wouldn’t say there’s a timeline, but it’s going to be pretty soon,” he told reporters.
Trump also told reporters he had ordered a freeze on aid to South Africa — this year’s host nation for the Group of 20 leading economies, over its land expropriation laws. The rand fell nearly 2%.
(Updates with additional details on UK comments starting in 10th paragraph.)
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