Trump slaps 30% tariffs on EU and Mexico from August 1, deepening global trade rift

In a bold move on Saturday, US President Donald Trump announced the imposition of 30 per cent tariffs on two of the United States' largest trade partners, the European Union (EU) and Mexico, intensifying his "America First" trade policies ahead of his 2024 campaign. Trump revealed the tariffs through letters posted to his social media accounts, criticising both nations for their trade practices.

In his letter to Mexico's president, Trump acknowledged the country’s role in addressing the flow of undocumented migrants and fentanyl into the US. However, he stated that the country had not done enough to prevent North America from becoming a "Narco-Trafficking Playground," demanding more robust actions. "Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough," Trump wrote, emphasising his frustration with the country’s border security efforts.

Trump's letter to the European Union, however, was more focused on trade imbalances. The former president slammed the US's persistent trade deficit with the EU, calling it a "national security threat." "We have had years to discuss our Trading Relationship with the European Union, and we have concluded we must move away from these long-term, large, and persistent Trade Deficits," Trump stated. He also pointed to the EU’s tariffs, non-tariff policies, and trade barriers as the root cause of the economic imbalance.

This latest round of tariffs is part of Trump’s broader trade strategy aimed at reshaping global trade rules. For decades, countries have abided by tariff rates established through multilateral negotiations, but Trump’s policies seek to upend those agreements. His new tariffs target 24 countries, including the 27-member European Union, effectively dismantling long-standing trade protocols.

As part of his reelection campaign, Trump has consistently argued that such moves will help revive the US economy, which he claims has been taken advantage of by other nations. However, experts like former Congressional Budget Office director Douglas Holtz-Eakin warn that the tariffs could push countries to seek alternative trade alliances, diminishing the US's economic influence.

With talks between the EU and US stalled, it remains to be seen whether Trump's new tariffs will spark further economic conflict or eventually lead to a new round of negotiations.

(AP inputs)