Trump Threatens 30% Tax on EU Goods
Trade tensions escalate as deadline looms for US-EU agreement.
Amid ongoing trade negotiations, the United States is ratcheting up the pressure, as **President Trump** has proposed a significant 30% tax on goods imported from the European Union, potentially disrupting the €1.684 trillion transatlantic trade relationship.
Proposed Tariffs
**President Trump** conveyed his intentions in a letter to the European Commission, declaring the U.S. will impose a 30% input tax on products coming from the EU starting August 1. Mexico is also facing similar levies.
In response, Commission President Ursula von der Leyen stated she remains optimistic about reaching a trade agreement. “At the same time, we will take all necessary steps to protect European interests, including proportional countermeasures, if necessary.”
Although **Trump’s** announcements create uncertainty, analysts at Allianz Trade suggest that, despite ongoing trade conflicts, global trade is expected to grow modestly in 2024 (Allianz Trade).
Trump’s Grievances
The president’s letter emphasizes his perception of unfair trade practices. He believes the U.S. imports more goods from Europe than it exports.
While past announcements of levies have been 20%, **Trump** recently mentioned 50% taxes on Truth Social. The current proposed rate falls between these figures, potentially as a negotiating tactic.
**Trump’s** recent message aims to exert additional pressure during negotiations. EU-Handelsmisser Šefčovič stated days ago that talks were nearing completion, anticipating a swift agreement.
While an agreement was initially hoped for before July 9, the U.S. extended negotiations until August 1.
This announcement follows similar levies communicated to twelve other countries, including Japan and South Korea, which will face a 25% tax.
Despite the potential impact of these taxes, reactions have been muted, as investors seem accustomed to fluctuating percentages proposed by **Trump** during trade discussions.
