Trump Imposes 30% Tariff on EU and Mexico, Effective from August 1

[Financial News]  


Donald Trump, President of the United States, announced on the 12th (local time) that he would impose a 30% tariff on the European Union (EU) and Mexico.

As with other countries, the new tariff rate will apply from August 1.

Previously, President Trump sent a letter notifying that he would impose a 25% tariff on South Korea and Japan, starting with Brazil at 50% and Canada at 35%.

A total of 23 countries received Trump's trade letter notifying them of the new U.S. tariff rates.

On this day, a 30% tariff was notified to the EU, which consists of 27 member states, and Mexico, which borders the United States.

The recipients of these letters, which Trump also posted on his social media, Truth Social, are Ursula von der Leyen, President of the European Commission, and Claudia Sheinbaum, President of Mexico.

Trump told President Sheinbaum, "Mexico has helped me keep the border safe," but also stated, "However, what Mexico has done is not enough."

He also mentioned that for the EU, if the 27 EU member states "or companies within the EU decide to build or produce products within the United States," tariffs will not be imposed.

Instead, Trump warned that if the EU or Mexico retaliates with high tariffs, "whatever number we have decided to raise will be added to the 30% we impose."

The EU tried to avoid receiving Trump's trade letter notifying the unilateral tariffs set by the U.S. by accelerating last-minute trade negotiations, but could not escape the arrow.

In particular, the EU showed signs of reaching a settlement in trade negotiations with the U.S. recently, with Trump retreating from the 50% tariff threat, but failed to escape the same fate as other countries.

According to the U.S. Trade Representative (USTR), the 27 EU member states export more to the U.S. than any other country.

The EU exported $553.3 billion (about 763 trillion won) worth of goods to the U.S. in 2022.

This is significantly higher than the $536.3 billion of China, the top individual country, and $454.8 billion of Mexico, the second place.

Canada, which will be subject to a 35% tariff, ranks third with $436.6 billion in exports to the U.S., followed by Japan ($148.1 billion) and Germany ($146.6 billion).

The EU is on high alert.

Ursula von der Leyen, President of the European Commission, warned in a statement that if the U.S. imposes a 30% tariff on EU exports, it will disrupt the key supply chains across the Atlantic, ultimately harming both sides' businesses, consumers, and patients.

She emphasized that the EU is still ready to continue efforts to reach an agreement with the U.S. by August 1, highlighting the willingness to negotiate.

At the same time, von der Leyen made it clear that the EU could retaliate against the U.S. She stated, "At the same time, we will take all necessary measures to protect the EU's interests," adding, "If necessary, this includes taking proportionate retaliatory (tariffs)."

dympna@fnnews.com Song Kyung-jae Reporter