Washington: In a major move intensifying the global trade conflict, U.S. President Donald Trump has declared his intent to impose a 30% tariff on imports from both Mexico and the European Union, effective August 1. The dramatic announcement follows a breakdown in months-long negotiations with key U.S. trading partners aimed at reaching a broad trade agreement.
Trump disclosed his tariff threats through letters addressed to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, which he publicly posted on his social media platform, Truth Social. The letters framed the new duties as part of a broader effort to address what he views as unequal trade relationships.
Reacting sharply, both the EU and Mexico criticized the proposed tariffs as unjust and economically damaging. However, they expressed readiness to continue dialogue in hopes of finding a resolution before the looming deadline. President Sheinbaum of Mexico remained measured, stating that Mexico will act calmly and stand firm on preserving its national sovereignty. “We are clear on where cooperation is possible, and on where our sovereignty is non-negotiable,” she said during a public appearance in Sonora.
The U.S. leader’s latest move isn't limited to Mexico and the EU. In recent days, he has issued similar letters to over 20 nations including Canada, Japan, and Brazil announcing tariff rates ranging between 20% and 50%, with copper imports facing the highest penalty.
Trump emphasized that the newly proposed 30% tariffs are separate from existing ones, meaning current levies of 50% on steel and aluminum and 25% on automobiles will stay intact. The August 1 deadline appears to be a negotiating window, though analysts caution that Trump has a track record of dialing back threats under pressure.
This latest wave of tariff threats marks a return to the confrontational trade stance Trump adopted earlier this year, which rattled global markets. Despite pushing dozens of new trade proposals in recent months, substantial progress has only been made with a handful of countries such as Britain, China, and Vietnam.
In his letter to the EU, Trump demanded the bloc dismantle its own tariffs, asserting that unrestricted access for U.S. goods is necessary to fix the “massive trade imbalance.” Von der Leyen, however, warned that the proposed duties could upend critical supply chains and vowed that the EU would not hesitate to retaliate if its interests were harmed.
Mexico’s economy ministry confirmed receipt of the U.S. notice and echoed concerns over unfair treatment. Interestingly, the 30% rate on Mexican imports is lower than the 35% proposed for Canada a discrepancy Trump attributed to differences in cooperation on border security and drug enforcement. He accused Mexico of insufficient action against drug cartels, claiming they are trying to turn North America into a “narco-trafficking playground.”
While Mexico remains America’s top trading partner with over 80% of Mexican exports heading north Trump’s accusations complicate the diplomatic landscape. U.S. data shows that although Mexico is a major corridor for fentanyl trafficking, the chemicals used to produce the drug largely originate from China.
Europe, meanwhile, had hoped for a comprehensive trade pact with Washington but has since scaled back expectations, focusing instead on a framework deal akin to the post-Brexit agreement with the UK. EU member states remain divided, with Germany pressing for rapid consensus to protect its export-heavy industries, while France and others advocate resisting a U.S.-dominated agreement.
Bernd Lange, head of the European Parliament’s trade committee, called for swift EU countermeasures, decrying Trump's actions as damaging to the spirit of partnership. “This is not how you treat a strategic ally,” Lange said.
Experts warn that the standoff could trigger a new round of tit-for-tat tariffs reminiscent of the U.S.-China trade war, which unsettled markets globally. Jacob Funk Kirkegaard of the Bruegel think tank noted, “We could see another cycle of escalation and partial de-escalation, but the economic costs will still be real.”
Despite diplomatic backlash, Trump’s tariff measures are significantly boosting federal revenues, with U.S. customs duties surpassing $100 billion this fiscal year, according to Treasury data.
However, the long-term fallout may be geopolitical. Japan’s Prime Minister Shigeru Ishiba recently urged a shift away from U.S. dependency, and several U.S. allies, including Canada and parts of Europe, are reconsidering their military procurement strategies increasingly eyeing non-American defense suppliers amid growing uncertainty in transatlantic relations.