U.S. President Donald Trump warned he would impose much higher tariffs on the European Union (EU) and Canada if they work together to challenge U.S. trade policies. In a Truth Social post on Thursday, Trump stated, “If the European Union works with Canada to harm the U.S. economy, far larger tariffs will be placed on both countries to protect the best friend they’ve ever had!”
Trump’s statement comes after he announced plans to introduce a 25% tariff on foreign-made cars, set to take effect on April 2. The tariffs will also apply to car parts such as engines, transmissions, and electrical components, which are crucial to U.S. car production. These measures are expected to generate over $100 billion in annual revenue, according to White House aide Will Scharf.
The announcement has caused turmoil in global markets, with stock prices for U.S. and Asian automakers dropping, and European car manufacturers expected to face similar losses. Trump has already made waves in international trade by imposing tariffs on Mexico, Canada, China, as well as steel and aluminum imports, all due to perceived unfair trade deficits with key U.S. trading partners.
The White House has framed these new tariffs as a way to protect and strengthen the U.S. automotive industry. However, analysts warn that because U.S. carmakers rely heavily on imported parts, the tariffs could have adverse effects on domestic production as well.
While neither the EU nor Canada has officially responded to Trump’s claims of coordinated retaliation, both parties have expressed concerns. EU Commission President Ursula von der Leyen emphasized that tariffs are harmful to both businesses and consumers, while Canada’s Prime Minister Mark Carney called the move a “direct attack” and vowed to defend Canadian workers and businesses.
The tariffs are seen as a significant blow to Europe’s already struggling automotive sector, which faces intense competition from Asian manufacturers. The European Automobile Manufacturers’ Association voiced its concerns, noting that the tariffs come at a critical time for the industry’s transformation.
Economists have raised alarms about the inflationary effects of these tariffs, warning that they could drive up car prices for U.S. consumers at a time when consumer confidence is already low. Analysts predict the tariffs could increase car prices by $5,000 to $10,000, putting additional strain on U.S. consumers.
The move has sparked debate about the long-term impact of Trump’s tariff policies on both global trade and the U.S. economy, with many questioning whether these aggressive measures are sustainable.
