Donald Trump has announced plans to impose 25% tariffs on goods imported from the European Union, specifically targeting the automotive sector. The US president accused the EU of being “formed to screw the United States,” escalating tensions between the two economic powers.
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During his first cabinet meeting of the second term, Trump revealed that the decision on tariffs would be announced soon. “It’ll be 25% generally speaking, and that will be on cars and all other things,” he stated. This move raises concerns about a potential transatlantic trade war, which could harm both the US and European economies and further strain diplomatic relations among Western allies.
The European Commission responded swiftly, vowing to “react firmly and immediately against unjustified barriers to free and fair trade” if the tariffs are implemented. The euro dipped by 0.2% to $1.0467 in early trading following the announcement.
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Broader Tariff Plans and Delays
Trump’s tariff threats extend beyond the EU. The US president is also preparing to impose 25% tariffs on Canada and Mexico, citing concerns over undocumented immigration and fentanyl trafficking. Although Trump initially promised to implement these measures at the start of his second term, only tariffs targeting China have been enforced so far.
During the cabinet meeting, Trump suggested a possible delay in the tariffs on Canada and Mexico, pushing the implementation date to April 2. However, Commerce Secretary Howard Lutnick indicated that the levies might still take effect sooner if the neighboring countries fail to meet Trump’s demands on fentanyl control.
Criticism of the EU and Auto Industry Concerns
Trump reiterated his long-standing criticism of the EU, accusing the bloc of unfair trade practices. “They’ve really taken advantage of us in a different way. They don’t accept our cars. They don’t accept essentially our farm products,” he claimed. He went further, stating, “Let’s be honest, the European Union was formed in order to screw the United States. That’s the purpose of it. And they’ve done a good job of it.”
The proposed tariffs have sparked alarm in the automotive industry, which fears a significant decline in vehicle demand due to higher prices. A top executive from a major European auto parts supplier warned, “Consumers will not be able to absorb the increase in vehicle prices, and volumes will decline. The industry is already in a fragile position, and this massive uncertainty is slowing down deals, investments, and allocation of capital.”
Elon Musk’s Role and Broader Implications
The cabinet meeting also featured Elon Musk, who defended his efforts to reduce federal government spending. Musk argued that without these measures, “America will go bankrupt.” His presence highlighted the administration’s focus on economic reform and cost-cutting initiatives.
Trump’s tariff threats come just days after hosting French President Emmanuel Macron at the White House, where trade and Ukraine peace talks were discussed. Meanwhile, UK Prime Minister Sir Keir Starmer is set to meet Trump in Washington, underscoring the ongoing diplomatic engagements amid rising trade tensions.
As the situation unfolds, the global economy braces for potential disruptions, with the Trump EU tariffs poised to reshape trade dynamics between the US and Europe.
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