- Trump orders comprehensive reviews of trade issues by April 1.
- The president wants Canada and Mexico to crack down on illegal migrants.
- The tariff threat is also linked to illicit drugs, the White House adviser said.
WASHINGTON: US President Donald Trump on Tuesday pledged to impose tariffs on the European Union and said his administration was discussing a punitive 10% tariff on Chinese imports because fentanyl was being shipped from the China to the United States via Mexico and Canada.
Trump expressed his latest tariff threats in remarks to reporters at the White House a day after taking office, without immediately imposing tariffs as he had promised during his campaign.
Financial markets and trade groups briefly exhaled 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 European Union.
Trump said the EU and other countries also had worrying trade surpluses with the United States.
“The European Union is very, very bad with us,” he said, adding: “So they are going to find themselves facing tariffs. This is the only way… to get the ‘equity”.
Trump said Monday he plans to impose tariffs on Canada and Mexico unless they curb the smuggling of illegal migrants and fentanyl, including precursor chemicals, from China through their American borders.
Trump had previously threatened to impose 10% tariffs on Chinese imports over trade, but he realigned that amount with the Feb. 1 deadline.
White House trade adviser Peter Navarro said CNBC Early Tuesday, Trump’s tariff threat to Canada and Mexico was aimed at putting pressure on both countries to stop illegal migrants and illicit drugs from entering the United States.
“The reason he’s looking at 25%, 25% and 10%, or whatever, on Canada and Mexico and China is because 300 Americans are dying every day” from fentanyl overdoses, Navarro said. .
Trump announced a sweeping immigration crackdown on Monday, including a broad ban on asylum.
Review of business issues
President Trump also signed a sweeping trade memorandum, opening a new tab directing federal agencies to complete comprehensive reviews of a range of trade issues by April 1.
These include analysis of persistent U.S. trade deficits, unfair trade practices, and currency manipulation among partner countries, including China. Trump’s memo asked for recommendations on remedies, including a “comprehensive additional tariff” and changes to the $800 duty-free de minimis exemption for low-value shipments often blamed on illicit imports of precursor chemicals from the fentanyl.
The ordered reviews create some breathing room to resolve reported disagreements among presidential 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 fueled a rally in U.S. stocks that pushed the benchmark S&P 500 to its highest level in a month, even as Trump’s new salvo on China and the European Union could slow down this momentum.
Trump “probably decided to go a little slower and make sure that he has as strong a legal basis as possible for these kinds of actions,” said William Reinsch, a trade expert at the Center for Washington Strategic and International Studies.
“He seeks to use his influence to the best of his ability to get what he wants,” Reinsch added.
Conciliating tones
Mexico and Canada have adopted a conciliatory tone in response to Trump’s February 1 deadline. Mexican President Claudia Sheinbaum said she would emphasize Mexico’s sovereignty and independence and respond “step by step” to U.S. actions.
But she added that the free trade agreement between the United States, Mexico and Canada could not be renegotiated until 2026, a comment aimed at preempting suggestions that Trump would seek to quickly revamp the agreement which underpins more than $1.8 trillion in annual trilateral trade. .
Corn farmers are concerned about U.S. tariffs and retaliatory measures that are disrupting trade with Mexico, their largest corn export customer, and with Canada, the largest export customer for ethanol derived from U.S. corn .
“We understand he’s one to negotiate,” Illinois farmer Kenny Hartman Jr., chairman of the board of the National Corn Growers Association, said of Trump.
“We just hope we can get out of this situation without losing our exports – we won’t lose the corn going to Mexico or the ethanol going to Canada,” he added.