U.S. President Donald Trump hinted Sunday that his administration is considering imposing tariffs on the European Union, shortly after he signed off on an order for tariffs of as much as 25% on neighboring Canada and Mexico and an extra levy of 10% on China.
Speaking to reporters at Joint Base Andrews in Maryland, Trump criticized longstanding trade practices and vowed to take action to protect U.S. interests.
Asked if he is considering imposing tariffs on other countries, Trump confirmed that tariffs on the EU are likely, citing an over $300 billion trade deficit.
"It will definitely happen with the EU,” he said. "They’ve really taken advantage of us ...They don’t take our cars, they don’t take our farm products, they take almost nothing and we take everything from them.”
He described the EU’s trade practices as "an atrocity" and hinted at imminent action.
Financial market reaction on Monday reflected concerns about the fallout from a trade war. U.S. stock futures fell around 2%. Shares across Asia, including Tokyo, Seoul and Sydney also slid around 2%. Chinese stocks listed in Hong Kong fell by 0.8%, while the mainland China market was shut down during the Lunar New Year holidays.
The Chinese yuan, Canadian dollar and Mexican peso slumped against a soaring dollar. With Canada and Mexico as the top sources of U.S. crude oil imports, U.S. oil prices jumped more than $1, while gasoline futures rose by nearly 3%.
"I wouldn’t say there’s a timeline, but it’s going to be pretty soon," Trump added. EU said earlier on Sunday it would "respond firmly."
Brussels, until now, has said it hopes to avoid a trade conflict with Trump through negotiation.
"The EU regrets the U.S. decision to impose tariffs on Canada, Mexico and China," said a spokesperson for the European Commission.
"Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides."
The spokesperson said, "The EU would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods."
"At this time, we are unaware of additional tariffs being imposed on EU products," he added.
Asked about retaliatory measures from Canada, Trump did not rule out increasing tariffs.
"Well, it could happen if they do anything," he said.
As part of the new tariffs announced Saturday, Trump said that duties could increase if the targeted countries retaliate.
Canada announced 25% tariffs on a raft of American goods.
He accused Canada of restricting U.S. products, including farm goods and energy, while benefiting from open U.S. markets.
"It’s been a one-way street," he said. "We subsidize Canada by about $200 billion a year, and for what? We don’t get anything out of it."
Trump also revealed plans to speak with Canadian Prime Minister Justin Trudeau and Mexican officials on Monday.
"I don’t expect anything very dramatic," he said. "We put tariffs on; they owe us a lot of money, and I’m sure they’re going to pay.”
He emphasized the need for Canada and Mexico to address trade imbalances and curb illegal immigration.
"They have to balance out their trade numbers,” he said. "They’ve got to stop people from pouring into our country.”
Trump also linked trade policies to drug trafficking, particularly fentanyl.
"We have to stop fentanyl,” he said. "If they don’t stop it, the tariffs will get a lot worse.”
He acknowledged potential short-term economic pain but argued that long-term gains would outweigh the costs.
"We’ve been helping everybody for years, and ... I don’t think they appreciate it,” he said. "We’re going to change that fast and make America great again.”
