The European Union has warned Donald Trump faces a firm response if he imposes tariffs on the bloc.
A spokesperson for the European Commission said the EU isn’t aware of any extra tariffs being imposed on the bloc’s products, but Brussels would “respond firmly” to any trading partner that “unfairly or arbitrarily” imposes them on EU goods.
They said tariffs, which are effectively taxes imposed on goods imported from other countries, create “unnecessary economic disruption” and fuel inflation, as they push up prices for businesses that pass price hikes on to consumers.
The spokesperson said a lot was at stake, adding tariffs are hurtful to all sides and the EU backs low tariffs to drive growth and economic stability within a strong, rules based system of trade.
Brussels’ warning comes after the US president told reporters on Friday (January 31) he would “absolutely” impose tariffs on the EU, accusing the bloc of treating the United States “so terribly”.
Talk of tariffs has ramped up since Friday, when Trump announced trade penalties against Canada, Mexico and China, sparking a trade war with the US’s nearest neighbours and a geopolitical rival.
Canada’s Prime Minister Justin Trudeau and Mexico’s President Claudia Sheinbaum ordered retaliatory tariffs on goods from the US in response.
Trump’s administration imposed sweeping tariffs of 25% on goods from Canada and Mexico and 10% on imports from China.
Trudeau announced Canada will respond with 25% tariffs against $155billion worth of US goods, including alcohol, furniture and orange juice. He even suggested Canadians should not buy US products or go on holiday in the US.
The US leader responded on Sunday (February 2) by criticising Canada’s trade surplus with the United States and contending that without it, Canada ceases to exist as a viable country.
He posted on social media: “Harsh but true! Therefore, Canada should become our Cherished 51st State. Much lower taxes, and far better military protection for the people of Canada — AND NO TARIFFS!”
Mexico’s president has only announced her country will impose retaliatory tariffs, mentioning neither a rate nor products.
Academics and diplomats in Mexico criticised a “retaliation clause” Trump included, which threatens to raise tariff levels even higher if target countries hit back.
China said it will challenge Trump’s tariffs at the World Trade Organisation and take “counter-measures”, without giving specific details. Beijing urged Washington to “engage in frank dialogue” and to “strengthen cooperation”. The Asian giant also described fentanyl as “America’s problem”, pointing to “remarkable” results in its combating of drugs with the US.
Trump’s tariff orders say they are a consequence of illegal immigration and drug smuggling. This is despite US government reports that show unauthorised border crossings from Mexico have fallen over the past year, and seizures of the drug fentanyl along the northern border are relatively low.
But Trump’s order on Mexico claims drug traffickers and the country’s government “have an intolerable alliance” which “endangers the national security of the United States”.
His order on Canada says Mexican cartels are operating in that country and claims that, despite the modest amount of fentanyl intercepted, it would be enough to kill “9.5 million Americans”.
The order on China says Beijing provides a “safe haven” for criminal organisations to “launder the revenues from the production, shipment, and sale of illicit synthetic opioids”.
Those are the stated legal reasons, but Mr Trump has expressed a deep admiration for tariffs in general, claiming they will make the United States wealthier.