Donald Trump hits EU, Mexico goods with 30% tariff effective Aug 1

The EU had hoped to reach a comprehensive trade agreement with the US for the 27-country bloc

President Donald Trump on Saturday announced he's levying tariffs of 30 per cent against the European Union and Mexico.

Trump announced the tariffs on two of the United States' biggest trade partners in letters posted to his social media account.

In his letter to Mexico's leader, Trump acknowledged that the country has been helpful in stemming the flow of undocumented migrants and fentanyl into the United States.

But he said the country has not done enough to stop North America from turning into a Narco-Trafficking Playground.

US-EU trade is enormous

The tariffs could make everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the US. 

 

Notably, the European Commission describes the trade between the US and the EU as "the most important commercial relationship in the world.

 

The value of EU-US trade in goods and services amounted to 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros a day, according to EU statistics agency Eurostat. 

 

The biggest US export to Europe was crude oil, followed by pharmaceuticals, aircraft, automobiles, and medical and diagnostic equipment.

 

Europe's biggest exports to the US were pharmaceuticals, cars, aircraft, chemicals, medical instruments, and wine and spirits.

 

EU sells more to the US than vice versa

 

Trump has complained about the EU's 198 billion-euro trade surplus in goods, which shows Americans buy more from European businesses than the other way around.

 

However, American companies fill some of the gap by outselling the EU when it comes to services such as cloud computing, travel bookings, and legal and financial services.

 

The US services surplus took the nation's trade deficit with the EU down to 50 billion euros ($59 billion), which represents less than 3 per cent of overall US-EU trade.