WASHINGTON, Jan 22 — United States (US) President Donald Trump has vowed to hit the European Union (EU) with tariffs and said his administration was discussing a 10 per cent punitive duty on Chinese imports because fentanyl is being sent from China to the US via Mexico and Canada.
Trump voiced his latest tariff threats in remarks to the press at the White House a day after taking office, without immediately imposing tariffs as he had promised during his campaign.
Financial markets and trade groups exhaled briefly on Tuesday, but his latest comments underscored Trump's longstanding desire for broader duties and a new February 1 deadline for 25 per cent tariffs against Canada and Mexico, as well as duties on China and the EU.
Trump said the EU and other countries also had troubling trade surpluses with the US.
"The European Union is very, very bad to us. So they are going to be in for tariffs. It is the only way ... you are going to get fairness," he said, repeating comments made on Monday.
On Monday, Trump said that he was considering imposing duties on Canada and Mexico unless they clamped down on the trafficking of illegal migrants and fentanyl, including precursor chemicals from China, across their US borders.
Trump had previously threatened a 10 per cent duty on Chinese imports because of the trade but realigned that with the February 1 deadline.
White House trade adviser Peter Navarro told CNBC early on Tuesday that Trump's Canada and Mexico tariff threat was to pressure the two countries to stop illegal migrants and illicit drugs from entering the US.
"The reason why he is considering 25, 25, and 10 (per cent), or whatever it is going to be, on Canada, Mexico, and China, is because 300 Americans die every day from fentanyl overdoses, he said.
On Monday, Trump announced a sweeping immigration crackdown, including a broad ban on asylum.
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Donald Trump is sworn in as the 47th US President in the US Capitol Rotunda in Washington, DC, on January 20, 2025. — Picture by REUTERS[/caption]
April 1 reports
He signed a broad trade memorandum ordering federal agencies to complete comprehensive reviews of a range of trade issues by April 1.
These include analyses of persistent US trade deficits, unfair trade practices and currency manipulation among partner countries, including China.
Trump's memo asked for recommendations on remedies, including a "global supplemental tariff," and changes to the US$800 (RM3,569) de minimis duty-free exemption for low-value shipments often blamed for illicit imports of fentanyl precursor chemicals.
The reviews ordered create some breathing room to resolve reported disagreements among Trump's cabinet nominees over how to approach his promises of universal tariffs and duties on Chinese goods of up to 60 per cent.
Trump's more measured approach to tariffs fueled a rally in US stocks that pushed the benchmark S&P 500 index to its highest level in a month, though Trump's new salvo on China and the EU may deflate that momentum.
Trump likely "decided to go a little slower and also to make sure he has as firm a legal foundation as he can get for these kinds of actions. He is figuring out how to best use his leverage to get what he wants," said Washington-based Center for Strategic and International Studies trade expert William Reinsch.
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President Donald Trump and Vice-President JD Vance listen to Christopher Macchio sing during the 60th Presidential Inauguration in the Rotunda of the US Capitol in Washington, on January 20, 2025. — Picture by REUTERS[/caption]
Softer tones
Mexico and Canada struck conciliatory tones in response to Trump's February 1 deadline. Mexican President Claudia Sheinbaum said that she would emphasize Mexico's sovereignty and independence and would respond to US actions "step by step."
But she added that the US-Mexico-Canada free trade agreement was not up for renegotiation until 2026, a comment aimed at pre-empting suggestions that Trump will seek an early revamp of the pact that underpins over US$1.8 trillion (RM8.03 trillion) in annual three-way trade.
Corn farmers are worried about US tariffs and retaliatory duties disrupting trade with Mexico, their top export customer for corn, and with Canada, the top export customer for US corn-derived ethanol.
"We understand that he is a negotiating type of person. We are just hoping that we can come out of this where we do not lose the exports — we do not lose that corn going to Mexico or that ethanol going to Canada," said National Corn Growers Association board president and Illinois farmer Kenny Hartman Jr.
— Reuters
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US President Donald Trump signs pardons for January 6 defendants in the Oval Office at the White House on Inauguration Day in Washington, US, on January 20, 2025. — Picture by REUTERS[/caption]
