David Lawder and Andrea Shalal
WASHINGTON (Reuters) – U.S. President Donald Trump vowed on Tuesday to hit the European Union with tariffs and said his administration was discussing a punitive 10 percent tariff on Chinese imports because fentanyl is sent from China to the U.S. via Mexico and Canada.
Trump made his latest threats of tariffs in a White House press conference a day after taking office, without immediately imposing tariffs as he had promised during his campaign.
Financial markets and trade groups took a brief breather on Tuesday, but his latest comments underscored Trump’s long-held desire for broader tariffs and a new Feb. 1 deadline for 25% tariffs against Canada and Mexico, as well as tariffs on China and the EU.
Trump said the EU and other countries also have problematic trade surpluses with the United States.
“The European Union is very, very bad to us,” he said, echoing comments from Monday. “So they’re going to be included in the tariffs. That’s the only way … you’re going to get fairness.”
On Monday, Trump said he was considering imposing tariffs on Canada and Mexico unless they stop the smuggling of illegal migrants and fentanyl, including chemical precursors from China, across their US borders.
Trump had previously threatened a 10% tariff on Chinese imports over trade, but timed that with a February 1 deadline.
China said it was willing to maintain communication with the US to “properly resolve differences and expand mutually beneficial cooperation.” It sought to promote stable and sustainable ties with the US, the foreign ministry said.
“We always believe that there is no winner in a trade or tariff war. China will always firmly protect its national interests,” ministry spokesman Mao Ning told reporters at a regular press briefing on Wednesday.
White House trade adviser Peter Navarro told CNBC early Tuesday that Trump’s threat of tariffs on Canada and Mexico was pressure on the two countries to stop illegal migrants and drugs from entering the US.
“The reason he’s looking at 25, 25 and 10 (percent), or whatever, for Canada, Mexico and China is because 300 Americans die every day” from fentanyl overdoses, Navarro said.
On Monday, Trump announced a sweeping crackdown on immigration, including a broad asylum ban.
APRIL 1 REPORTS
Trump signed a sweeping trade memorandum on Monday ordering federal agencies to complete comprehensive reviews of a range of trade issues by April 1.
This includes analyzes of persistent US trade deficits, unfair trade practices and currency manipulation among partner countries, including China. Trump’s memo sought recommendations on remedies, including a “global supplemental tariff” and changes to the $800 de minimis duty-free exemption for low-value shipments often blamed for illegal imports of fentanyl precursor chemicals.
The ordered revisions created little room to resolve reported disagreements among Trump’s Cabinet nominees over how to approach his promises of universal tariffs and tariffs of up to 60% on Chinese goods.
Trump’s more measured approach to tariffs boosted U.S. stocks, which pushed the benchmark to its highest level in a month, although Trump’s fresh fire at China and the European Union could dampen that momentum.
Trump likely “decided to go a little slower and also make sure he has as solid a legal basis as possible for such actions,” said William Reinsch, a trade expert at the Center for Strategic and International Studies in Washington. “He figures out how to best use his power to get what he wants.”
GENTLE TONES
Mexico and Canada struck conciliatory tones in response to Trump’s Feb. 1 deadline. Mexican President Claudia Sheinbaum said she would emphasize Mexico’s sovereignty and independence and respond “step by step” to US actions.
But she added that the free trade agreement between the US, Mexico and Canada was not up for renegotiation until 2026, a comment aimed at preempting suggestions that Trump would seek an early overhaul of the pact that underpins more than $1.8 trillion in annual three-way deals trade.
farmers are worried about US tariffs and retaliation that are disrupting trade with Mexico, their largest export buyer of corn, and Canada, the largest export buyer of US corn-derived ethanol.
“We understand that he’s a negotiating type of person,” Illinois farmer Kenny Hartman Jr., chairman of the board of the National Corn Growers Association, said of Trump. “We just hope we can come out of this where we don’t lose exports — we don’t lose that corn that goes to Mexico or that ethanol that goes to Canada.”
