Global trade war to begin: After tariffs on Canada, Mexico, and China, now Donald Trump sets his sights on the UK and EU

US president Donald Trump extended the trade war to the European Union, following 25% tariffs on Canada, Mexico, and China.

Markets react

His action led to a plunge in global markets, with FTSE 100 falling more than 100 points, reported Daily Mail. Even stock exchanges in Germany, France, and Asia plummeted. The US dollar surged as investors ran for cover from perceived inflationary pressures and protracted interest rates.

EU added to Trump's tariff list

Trump termed the EU's trade practices "atrocious" and asserted that tariffs would be imposed on goods coming from the bloc, as per the report. His aggressive posture has already generated global concern regarding the effects of a full-scale trade war.


The president's comments intensified already existing tensions, especially since his ongoing 25% tariffs on Canada and Mexico, and a 10% tariff on Chinese goods.

In a surprising turn of events, Trump said that the UK's relationship with the US was "out of line," but he expressed hope that issues could be "worked out." On the other hand, he made it clear that the EU would face tariffs due to the US trade deficit with the bloc, which he described as "an atrocity" that means "they take almost nothing and we take everything from them," the Daily Mail quoted Trump.

UK Prime Minister Keir Starmer is caught in the middle as he faces a choice between the US and the EU.

According to The Daily Mail report, Starmer was cautious when asked about Trump's actions yesterday, he told reporters: "It is early days. What I want to see is strong trading relations." He also added, "In the discussions that I have had with President Trump, that is what we have centred on – a strong trading relationship."

Meanwhile, EU officials have started preparing countermeasures to respond to the US president's latest trade moves.

Trump intends to use tariffs as a political tool, demanding concessions on areas such as immigration as well as trade.

There would be a ripple effect if tariffs are imposed and this would impact companies of car manufacturing and luxury goods. Cars are among the biggest European exports to the US, alongside pharmaceuticals, and other machinery, as per the report.

FAQs

Why did Trump impose tariffs on the EU?
Trump criticized the EU’s trade practices , called them "atrocious," and pointed to a large trade deficit with the bloc.

What are the potential effects of these tariffs?
The tariffs could significantly impact global markets, especially industries like car manufacturing and luxury goods, with companies facing higher costs and possible retaliation from affected countries.