As US President Donald Trump is expecting to discuss with Canada and Mexico following his additional tariffs that triggered a decline in US stocks and sparked a trade war, he escalated his tariff threats toward the European Union as well.
Trump promised to contact Canadian Prime Minister Justin Trudeau and Mexican leaders to discuss the additional 25% tariffs, set to take effect on February 4, 2025. Trump expressed confidence that the two nations would pay what they owe to the US.
Following that comment, Trump confirmed that additional tariffs on the EU would take place, citing a large trade deficit. His comments have raised concerns about the trade war escalating beyond North America.
Furthermore, Trump’s threat to the EU has caused the euro to decline and push the US dollar to rise. The Latin American peso and Canadian dollar also saw significant declines. Meanwhile, stocks in Asia are taking heavy losses on Monday, along with the US stock futures.
Mexican President Claudia Sheinbaum is set to announce her retaliation plan, while Trudeau has pledged 25% additional tariffs on $106 billion worth of US goods. As for China, the world’s second-largest economy has not provided specifics but has promised countermeasures. In response, Trump threatened to escalate tariffs further unless these nations stop the flow of immigrants and fentanyl into the US.
In addition to increasing tariffs on Canada and Mexico, and threatening the EU with additional tariffs, Trump also halted aid to South Africa over its land expropriation laws. However, he exempted the UK from any immediate economic action, stating that he and Prime Minister Keir Starmer were “getting along very well” and could “work things out.”
