U.S. President Donald Trump announced intentions to impose new tariffs on European Union products in response to the EU's planned countermeasures. This development heightens the risk of a more significant trade conflict between two of the world's largest economic blocks.
Threat of New Tariffs on the European Union
In a meeting with Irish Prime Minister Michael Martin, Trump stated that the U.S. would increase tariffs on European goods if the EU proceeds with its counter-tariffs. This statement was a response to the EU's decision to implement retaliatory measures on American products starting in April. "Whatever they charge us, we’re charging them," Trump told reporters at the White House.
Canada’s Response and Market Reaction
Canada's Finance Minister Dominic LeBlanc declared that Canada would impose retaliatory tariffs on $29.8B worth of U.S. goods. "We will not stand idly by while our iconic steel and aluminum industries are being unfairly targeted," LeBlanc stated. The Canadian Central Bank cut interest rates in anticipation of potential economic disruptions. Meanwhile, the EU’s countermeasures are expected to target up to $28 billion in U.S. goods, including dental floss, diamonds, and bourbon.
ECB President Warns of Growing Uncertainty
European Central Bank President Christine Lagarde warned of increasing uncertainty related to recent U.S. decisions. She noted that the Trump administration's tariffs on steel and aluminum have prompted immediate EU retaliation. These actions could weaken EU exports to the U.S. and affect inflation.
Warnings about potential economic consequences continue, with experts suggesting that further hard-line tariff policies could lead to significant global market disruptions. The European Central Bank and other financial institutions are monitoring the situation closely in an attempt to predict future developments.
