Trump threatens 30% tariff on Mexico, EU

US President Donald Trump on Saturday threatened to impose a 30 percent tariff on imports from Mexico and the European Union starting on Aug 1, as experts warn that trade disputes and policy shifts are putting the global economy under strain.

In an escalation of a trade war that has angered allies and rattled investors, Trump announced the latest tariffs in separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum that were posted on his Truth Social platform on Saturday.

Both partners swiftly slammed the new duties, with the EU warning they could disrupt supply chains while Mexico branded them an "unfair deal".

French President Emmanuel Macron expressed "very strong disapproval" of the step and called on the EU to "resolutely defend European interests".

Trump sent similar letters to 23 other trading partners last week, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20 percent up to 50 percent, as well as a 50 percent tariff on copper.

The 30 percent rate was "separate from all sectoral tariffs", he said, indicating that 50 percent levies on steel and aluminum imports and a 25 percent tariff on auto imports would remain.

Trump's letter to the EU included a demand that Europe drop its own tariffs. "The European Union will allow complete, open market access to the United States, with no tariff being charged to us, in an attempt to reduce the large trade deficit," he wrote.

Von der Leyen said the 30 percent tariffs "would disrupt essential trans-Atlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic".

She also said that while the EU will continue to work toward a trade agreement, it "will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required".

The Mexican government said it had been informed of the new threat during talks in the US on Friday.

"We mentioned at the table that it was an unfair deal and that we did not agree," the Mexican economy and foreign ministries said in a joint statement.

Steven Kamin, a senior fellow at the American Enterprise Institute and former Federal Reserve official, said these anti-trade policies of the Trump administration are dragging down US growth to 1.4 percent this year from 2.8 percent last year.

"The Trump tariffs, which probably amount to about 15 percentage points higher than before Trump entered office, are a big contributor to the declining global growth," Kamin said at a panel discussion hosted by the Washington-based Brookings Institution in partnership with the World Bank on Thursday.

He estimated the tariffs' direct hit at about 1 percent of US GDP but warned that retaliatory tariffs and falling investment could make things worse.

The US economy has been holding up, he said. However, he raised concerns about Trump's protectionist approach, which has led to a 10 percent drop in the dollar's value this year. "It may reflect investor dismay with Trump's policies," Kamin said.

M. Ayhan Kose, deputy chief economist at the World Bank and a nonresident senior fellow at Brookings, introduced the main points from the World Bank's June 2025 Global Economic Prospects report, which says global growth is expected to drop to 2.3 percent this year, down 0.4 percentage points from January forecasts.

"There's much to cover, given the policy shifts, global deals, and unfolding developments," Kose said, noting that rising trade barriers, policy uncertainty, and financial market swings are driving the slowdown.

Global trade growth is forecast to slide to 1.8 percent this year from last year's 3.4 percent, fueled by higher tariffs and uncertainty, he added.

Chance to shine

Debora Revoltella, chief economist at the European Investment Bank, said she saw a chance to shine despite global headwinds in Europe. She projected European growth at 1.5 percent this year, with tariffs trimming about 0.3 percent.

"I think at this moment, there is a strong sense of a unique opportunity for Europe after many years of lost opportunity," Revoltella said, pointing out that with a trade openness of 45 percent compared with 25 percent for the US, Europe is pushing trade deals with regions such as South America, India and Indonesia.

The experts during the discussion called for global cooperation to tackle trade disputes and uncertainty. Kose urged "predictable, transparent frameworks to resolve trade tensions" and stronger macroeconomic policies. Revoltella emphasized Europe's commitment to open trade.

Agencies contributed to this story.

yifanxu@chinadailyusa.com