President Donald Trump has significantly sharpened the rhetoric in international trade relations, posting a sharp warning on Truth Social about the potential imposition of the largest tariffs ever on the European Union and Canada. His threats come amid ongoing trade tensions and efforts to redirect manufacturing capacity back to the United States.
Unprecedented tariff threats
Trump has clearly declared, “If the European Union is working with Canada to cause economic harm to the U.S., massive tariffs will be imposed, significantly higher than previously planned, in order to protect the best friend these countries have ever had!” This statement immediately caused jitters in the financial markets, with the euro falling slightly and the Canadian dollar taking a tumble.
Current steps in customs policy
The President has already taken concrete steps, announcing a 25% tariff on car imports, which applies to “all cars not manufactured in the United States”. These measures will come into force on 2 April and will affect not only complete vehicles but also automotive components, including engines, transmissions and electrical components.
Trump adviser Will Scharf estimates that these measures should bring in over $100 billion a year. Global markets reacted to the news with a fall in the shares of US and Asian carmakers.
Reaction of European institutions
The European Union is preparing for possible trade restrictions. European Commission President Ursula von der Leyen stressed that the EU “will continue to seek a negotiated solution while protecting its economic interests”. At the same time, she warned that “tariffs are taxes – harmful for businesses and even worse for consumers”.
France has called on the European Commission to consider using its toughest trade policy tool – the anti-trade instrument. From Brussels circles it is said that reciprocal tariffs will be in double digits and will be applied across the board.
Impact on the automotive industry
The automotive industry is the most vulnerable sector. Germany remains the most exposed EU country in terms of import tariffs – last year the US imported $24.8 billion worth of cars.
The European Automobile Manufacturers’ Association expressed its deep concern, stressing that these measures come at a critical moment in the industry’s transformation.
Other companies affected
Other significantly affected manufacturers include:
- Stellantis NV (manufacturer of Jeep, Alfa Romeo, Fiat)
- Jaguar Land Rover
- Volvo Car AB
- Premium brands like Porsche and Ferrari, which are completely dependent on imports
Economic evaluation
Economists warn that these measures could be inflationary and lead to higher prices for consumers. Analysts at Wedbush Securities estimate that these tariffs could increase the price of vehicles by $5,000 to $10,000.
International response
Canadian Prime Minister Mark Carney described Trump’s move as a “direct attack” and assured that he would defend the interests of Canadian workers, companies and the entire country.
An analytical perspective
From the perspective of the financial markets, this situation brings several interesting aspects to observe:
- Volatility of EUR/USD and CAD/USD currency pairs
- Potential impact on car companies’ share prices
- Possible changes in the business strategies of multinational companies
- The impact of geopolitical decisions on international trade flows
- Short- and long-term price oscillations in the automotive sector
Trump thus reaffirms his unpredictable trade strategy, which can significantly affect the global economic environment.
