United States(US) President Donald Trump has imposed a 30% tariff on imports from Mexico and the European Union, effective August 1, 2025. The decision comes after weeks of negotiations between the US and its major trading partners failed to yield a comprehensive trade deal.
Trump announced the new tariffs in separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, citing trade imbalances and Mexico’s role in undocumented migration and illicit drugs flowing into the US.
In the letters, Trump framed the tariffs as a necessary step to correct economic “injustices” that pose “a major threat to our Economy and, indeed, our National Security.” He emphasized that the tariffs could be avoided if companies relocate manufacturing to the US, promising expedited approvals for such businesses. Trump warned against retaliatory measures, stating that any increase in tariffs by the EU or Mexico would be matched and exceeded by the US.
The EU had been hoping to conclude a tentative deal with the US to avoid the tariffs, but Trump’s letter has dampened optimism for an 11th-hour agreement. European Commission President Ursula von der Leyen responded, saying, “A 30% tariff on EU exports would hurt businesses, consumers, and patients on both sides of the Atlantic. We will continue working towards an agreement by August 1. At the same time, we are ready to safeguard EU interests on the basis of proportionate countermeasures.” Some EU officials view Trump’s threat as a negotiating tactic.
The 27-country EU bloc is under conflicting pressures, with powerhouse Germany urging a quick deal to safeguard its industry, while other EU members, like France, have expressed concerns about caving into a one-sided deal that benefits the US. Trump’s tariff orders have generated tens of billions of dollars in new revenue for the US government, with US customs duties revenue exceeding $100 billion in the federal fiscal year to June.
This move is part of a broader trade strategy, with Trump issuing tariff announcements for over 20 countries, including Japan, South Korea, Canada, and Brazil. The tariffs range from 20% to 50%, depending on the country. Trump’s cascade of tariff orders has injected uncertainty into global financial markets, and the global economy seems set to continue on a rollercoaster trajectory.