Trump hiking tariffs on E.U., Mexico to 30%
President Donald Trump continues setting higher tariff rates on countries and governing bodies around the globe, effective Friday, Aug. 1.
Trump sent letters on Friday, July 11 to President Claudia Sheinbaum Pardo of Mexico and President Ursula von der Leyen of the European Union, informing both that they would have tariff rates on goods imported to the U.S. raised to 30% on Aug. 1 if they do not reach new trade agreements with the U.S.
Currently, most Mexican imports to the U.S. have a 25% levy placed on them while most EU imports are assessed a 10% tariff. A tariff higher than 30% will apply to any imports from Mexico or the E.U. which are “transshipped” (sent to the U.S. via a third country to evade the tariff rates), and any retaliatory tariffs imposed by either government on U.S. goods will have the same percentage added on to the 30% tariff rate.
[READ MORE: Trump's tariffs on Canada, China, Mexico take effect — countries respond]
In the letters, Trump cited what he said has been Mexico’s failure to halt the flow of fentanyl and other illegal drugs over its border with the U.S. (saying Mexico-based drug cartels are trying to turn all of North America into a “Narco-Trafficking Playground.”)
Since September 2024, nearly all fentanyl seized by the U.S. came through the Southern border with Mexico, according to the U.S. Customs and Border Patrol (CBP), reported ABC News. Less than 1% of fentanyl was seized at the Northern border with Canada, CBP found.
The president also chastised both Mexico and the E.U. for maintaining what he called unacceptable tariffs, deficits and trade barriers on U.S. imports. Trump also said in the letters that if Mexico works with the U.S. to halt the flow of fentanyl over the border or if either entity adjusts their tariffs on U.S. goods, he could adjust tariffs on their imports in return. Tariffs will not apply to products foreign-based companies manufacture or build in the U.S.
Data from the Office of the U.S. Trade Representative indicates the E.U. and Mexico are both among the top U.S. trading partners, with imports from the E.U. exceeding a value of $553 billion in 2022 and imports from Mexico nearing $455 billion that same year.
In comments emailed to Chain Store Age, Simon Geale, executive VP of global procurement and supply chain consulting firm Proxima, cautioned that 30% tariff on E.U. imports would be a “significant escalation” in trade tensions.
"U.S. businesses rely heavily on European materials, components and finished goods," Geale said in the email. "The immediate impact will be rising costs, supply disruption and the need for urgent risk mitigation. For companies with deep dependencies on European suppliers, particularly those without strong multi-source strategies, the effects could be substantial."
Geale advised U.S. companies to "plan for disruption" and said they should assess their potential exposure to tariffs and "engage suppliers and accelerate diversification or nearshoring plans."
U.S. tariff policy – a review
Mexico was not included among the countries targeted for reciprocal tariffs initially placed on April 2, since it already had a 25% rate imposed on its goods.
Those reciprocal tariffs, including a 20% duty on E.U. imports. were initially delayed from going into effect until Wednesday, July 9 and have since been postponed until Friday, Aug. 1.
In addition, most China tariffs placed separately by Trump have also since been paused until mid-August as the two countries attempt to negotiate a trade deal.
In multiple actions in the past week, Trump placed additional tariffs on imports from countries including Japan and South Korea as part of the delayed tariff initiative and set a new 50% tariff on Brazilian imports and 35% on Canadian imports, all effective Aug. 1.
Trump also reached an agreement in May with U.K. Prime Minister Keir Starmer that will increase U.S. access to U.K. markets while limiting tariffs on U.K. imports.
