The economist's statement that the new tax, which is supposed to be implemented from August 1, has put the EU, like other countries in the world, in a circle of uncertainty.
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US President Donald Trump on Saturday announced a 30 percent tariff increase targeting Mexico and the European Union (EU). Earlier this year, the US imposed a new tariff of 25 percent on Mexican goods. Similarly, Trump imposed a 20 percent tariff on the EU last April.
In less than seven months, the US has increased tariffs on Mexican goods for the second time. Products entering the United States under the Trilateral Agreement between the United States, Mexico and Canada (USMCA) are being exempted.
President Trump said in a post on his Truth Social, "Both of these tax announcements will be effective from August 1." Trump mentioned that taxes had to be increased due to Mexico's role in the flow of illegal drugs to the United States and the trade imbalance with the EU.
"Mexico is helping to secure the border, but what Mexico has done is not enough," Trump said in a letter to Mexican President Claudia Sheinbaum. The EU has warned that it will disrupt the supply system with the US in response. But the EU said that it is ready to continue negotiations for some kind of agreement before August 1, when the tax will be implemented. Since taking office for a second term in January, Trump has been targeting his competitors and allies with massive tax increases. Trump's "tariff action" has devastated the world's financial markets and has also increased the fear of global economic recession.
The Trump administration has been pressuring trading partners to come to an agreement before the new tax is implemented. So far, the US has reached an agreement with the UK and Vietnam and has temporarily reduced the retaliatory tariffs with China.
supply chain disruption
Ursula von der Leyen, head of the European Commission, issued a statement and said, "Taking a 30 percent tax on EU exports will disrupt the supply chain between businesses and consumers on both sides of the Atlantic Ocean." She said, "If necessary, proportional countermeasures can also be adopted." After Trump imposed separate taxes on steel and aluminum imports at the beginning of this year, the EU prepared to impose retaliatory taxes on American goods worth about 21 billion euros.
Since this week, Trump has sent letters to more than 20 countries updating taxes for each country, including a 35 percent tax for Canada. Josh Lipsky, chair of international economics at the Atlantic Council, said: "Despite all the movement for a deal, the new tariffs show that the EU is in a state of uncertainty, like almost every country in the world."
