If you were tired of hearing about tariffs, then I’ve got some bad news for you. President Trump just unveiled his latest round of tariff ultimatum, setting a 30% duty on things made in Mexico and the European Union. He sees to be going with the “never let ’em know your next move” method of haphazard negotiation.
The President announced the changes in two letters posted on social media over the weekend. He informed some very important trade partners that the new rates would kick in on August 1 if they could not negotiate better terms. His past few weeks have been split between this confusing (and expensive) shuffling of tariffs and dodging questions about Jeffrey Epstein. These latest levels are tweaked from the tariff levels he proposed in April. From Automotive News:
The EU had been hoping to conclude a tentative deal with the U.S. to stave off higher tariffs, but Trump’s letter punctured the recent optimism in Brussels over the prospects for an 11th-hour agreement between the major economies.
Trump did, however, leave an opening for additional adjustments.
“If you wish to open your heretofore closed Trading Market to the United States, and eliminate your Tariff, and Non-Tariff, Policy and Trade Barriers, we will, perhaps, consider an adjustment to this letter,” Trump wrote.
The tariff rates would apply widely, though separate from the president’s sectoral tariffs on products such as automobiles and steel. If implemented, it could place the EU at a competitive disadvantage on American exports to the neighboring U.K., which left the bloc in 2020 and was the first country to come to a top-line trade pact with Trump.
Germany’s VDA auto association tells AutoNews that there is still no solution to easing the current 27.5% duty on cars imported from the EU to the U.S. At the same time, European automakers are still holding out hope (such a silly move) that the two entities can reach some sort of agreement to lower auto import tariffs, potentially including a so-called “netting mechanism” to offset imports with exports. Something like this could be based on the value of exports out of the U.S. market, rather than the number of exported vehicles.
In Mexico, Trump wants President Claudia Sheinbaum to continue supporting the securing of the border between the two North American countries.
Trump added that if Mexico “is successful in challenging the cartels and stopping the flow of Fentanyl,” the U.S. would consider adjusting the levies.
“These tariffs may be modified, upward or downward, depending on our relationship with your country,” he added.
The letter is silent on whether the U.S. will preserve a carve-out for goods traded under the USMCA trade deal, which have been exempt from the current 25 percent rate. The administration has previously said it will keep the exemption for Canada.
Other countries Trump has pointed to for tariff hikes in recent days include South Korea, South Africa, Indonesia, Thailand, and Cambodia, as well as Algeria, Libya, Iraq, and Sri Lanka.Â
What is bro doing?
