Trump warns ‘if the EU and Canada work to do financial hurt to the USA’ they are going to be hit with ‘far LARGER tariffs than at the moment deliberate’ after slapping 25% on all foreign-made automobiles

Donald Trump has warned the European Union and Canada they can expect to contend with ‘large scale tariffs’ if they seek to do ‘economic harm to the USA’ in an unsettling post early this morning. 

The US President plans to impose a 25% tariff on imported cars and light trucks starting on April 3, and earlier this month rolled out an increase in tariffs on all steel and aluminium imports from the European bloc.

This prompted the EU to retaliate with a series of duties on US industrial and agricultural products from April 1, setting the foundation of what could prove to be a damaging trade war. 

Posting on his Truth Social platform this morning, Trump declared: ‘If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!’

Some European leaders and industry chiefs have lobbied for mediation and called for EU-US talks to avert a spiralling economic battle.

‘We urge President (Donald) Trump to consider the negative impact of tariffs not only on global automakers but on US domestic manufacturing as well,’ said Sigrid de Vries, director general of the European Automobile Manufacturers’ Association (ACEA).

‘Tariffs will not just impact imports into the US, a penalty that American consumers are likely to pay, but measures on automotive parts will also hurt automakers producing cars in the US for export markets,’ ACEA said.

However, others appeared committed to fighting US economic penalties head-on.

French Finance Minister Eric Lombard declared in an interview with France Inter radio this morning: ‘The hostility is increasing. The only solution for the European Union will be to raise tariffs on American products in response.’

The UK meanwhile is working hard to avoid Trump’s wrath. 

‘We are not at the moment in a position where we want to do anything to escalate these trade wars,’ Finance Minister Rachel Reeves told Sky News when asked if Britain would impose retaliatory tariffs against the US.  

‘Trade wars are no good for anyone.’

Washington’s new levies on cars and light trucks will take effect next Thursday – the day after Trump plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit.

They come on top of duties already introduced on steel and aluminium, and on goods from Mexico, Canada and China.

Britain has hoped to avoid tariffs with the US, arguing that both countries report trade surpluses with each other – including goods and services – owing to measurement differences.

London is also trying to agree a tech-led deal with Washington that it hopes will potentially spare it the direct hit of tariffs on its own exports.

The EU meanwhile was expecting to face the US tariffs on steel and aluminium, but the measures still place great strain on already tense transatlantic relations. 

The EU’s retaliatory measures will cover goods from the United States worth some 26 billion euros ($28 billion), and not just steel and aluminium products, but also textiles, home appliances and agricultural goods. 

Motorcycles, bourbon, peanut butter and jeans will be hit, as they were during President Trump‘s first term.

But Trump’s freshly announced tariffs on imports of cars and light trucks will undoubtedly cause more pain in Europe.

The automotive sector is the jewel in Europe’s industrial crown, employing around 13 million people and contributing some seven percent to the European Union’s economy.

This month, the EU unveiled a rescue plan for the sector, which the 27-country bloc’s industry chief said was in ‘mortal danger’.

The ACEA said European manufacturers export between 50 and 60 percent of the vehicles they make in the US, which it described as making a ‘substantial positive contribution to the US trade balance’.

‘The EU and the US must engage in dialogue to find an immediate resolution to avert tariffs and the damaging consequences of a trade war,’ the association added.

European Commission President Ursula von der Leyen said in a statement announcing the measures on March 12 that the bloc ‘will always remain open to negotiation.’

‘As the US are applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros,’ she said. The commission manages trade and commercial conflicts on behalf of the 27 member EU countries.

‘We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,’ von der Leyen said.

The commission also said that steel and aluminium products would be hit in return, as well as textiles, leather goods, home appliances, household tools, plastics, and wood. Agricultural products will also be impacted – including poultry, beef, some seafood, nuts, eggs, sugar and vegetables.

Trump said his taxes would help create US factory jobs, but von der Leyen said: ‘Jobs are at stake. Prices will go up. In Europe and in the United States.’

‘We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy,’ she said.

Trump slapped similar tariffs on EU steel and aluminium during his first term in office, which enraged European and other allies. The EU also imposed countermeasures in retaliation at the time, raising tariffs on US-made motorcycles, bourbon, peanut butter and jeans, among other items.

This time, the EU action will involve two steps. First, the commission will reintroduce what it calls ‘rebalancing measures,’ which the EU had from 2018 and 2020 but which were suspended under the Biden administration, then additional duties targeting 18 billion euros ($19.6 billion) in US exports to the bloc.

EU Trade Commissioner Maros Sefcovic travelled to Washington last month in an effort to head off the tariffs, meeting with US Commerce Secretary Howard Lutnick and other top trade officials.

‘I argued to avoid the unnecessary burden of measures and countermeasures, but you need a partner for that. You need both hands to clap,’ Sefcovic told reporters at the European Parliament in Strasbourg, France.

The EU could lose up to 3.7 million tons of steel exports, according to Henrik Adam, president of the Eurofer European steel association.

‘It will further worsen the situation of the European steel industry, exacerbating an already dire market environment,’ Adam said last month.

The US is the second biggest export market for EU steel producers, representing 16% of the total EU steel exports.

‘Losing a significant part of these exports cannot be compensated by EU exports to other markets,’ Adam said.

The EU estimates that annual trade volume between both sides stands at about $1.5 trillion, representing some 30% of global trade. While the bloc has a substantial export surplus in goods, it says that is partly offset by the US surplus in the trade of services.

The commission says that trade in goods reached 851 billion euros ($878 billion) in 2023, with a trade surplus of 156 billion euros ($161 billion) for the EU. 

Trade in services was worth 688 billion euros ($710 billion) with a trade deficit of 104 billion euros ($107 billion) for the EU.

Meanwhile, British Business Secretary Jonathan Reynolds said Wednesday he would ‘continue to engage closely and productively with the US to press the case for UK business interests.’ 

He did not rule out future tariffs on US imports, saying ‘we will keep all options on the table and won’t hesitate to respond in the national interest.’

Center-left Prime Minister Keir Starmer has worked to build strong ties with Trump, in hope of avoiding the tariffs levied on many other US trading partners.

Reynolds said the government remains ‘focused on a pragmatic approach and is rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy.’