Trump confirms EU tariffs “definitely coming” amid trade war with Mexico, Canada, China
WASHINGTON – President Donald Trump said he would talk on Monday with the leaders of Canada and Mexico, who have announced retaliatory tariffs of their own, but downplayed expectations that they would change his mind.
“I don’t expect anything dramatic,” Trump told reporters as he returned to Washington from his Mar-a-Lago estate in Florida. “They owe us a lot of money, and I’m sure they’re going to pay.”
He also said tariffs on the European Union would go ahead but did not say when. European leaders meet in Brussels on Monday and are expected to discuss tariffs in the wake of Trump’s comments.
“It will definitely happen with the European Union. I can tell you that because they’ve really taken advantage of us,” Trump told reporters on Sunday.
“They don’t take our cars, they don’t take our farm products. They take almost nothing, and we take everything from them.”
The tariffs on Canada, Mexico, and China, outlined in three executive orders, are due to take effect at 12:01 a.m. ET (0501 GMT) on Tuesday.
Economists warned that the Republican president’s plan to impose 25% tariffs on Canada and Mexico, along with a 10% tariff on China—America’s three largest trading partners—could slow global growth and raise prices for American consumers. Trump himself acknowledged that this might cause “short-term” pain for Americans, as the country works to curb immigration, narcotics trafficking, and spur domestic industries.
The financial market reaction on Monday reflected concerns about the fallout from a trade war. U.S. stock futures NQc1 and EScv1 fell around 2%. Shares across Asia, including Tokyo. N225, Seoul .KS11 and Sydney .AXJO also slid around 2%. Chinese stocks listed in Hong Kong .HSCE fell 0.8%, while the mainland China market was shut for Lunar New Year holidays.
The Chinese yuan, Canadian dollar, and Mexican peso all slumped against a soaring dollar. With Canada and Mexico, the top sources of U.S. crude oil imports, U.S. oil prices CLc1 jumped more than $1, while gasoline futures RBc1 rose nearly 3%.
North American companies braced for new duties, which could upend industries from autos to consumer goods to energy.
Trump’s tariffs will cover almost half of all U.S. imports and would require the United States to more than double its own manufacturing output to cover the gap—an unfeasible task in the near term, ING analysts wrote in a note on Sunday, adding that, “Economically speaking, escalating trade tensions are a lose-lose situation for all countries involved.”
Other analysts said the tariffs could throw Canada and Mexico into recession and usher in “stagflation”—high” inflation, stagnant economic growth, and elevated unemployment—at home.
