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By Jasmine Laws
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After imposing tariffs on China, Canada and Mexico over the weekend, President Donald Trump suggested that the European Union (EU) could be next to face duties, while hinting that the U.K. might be able to avoid them.
Why It Matters
Tariffs are often used to protect domestic industries by making foreign goods more expensive and encouraging consumers to buy domestically, according to the Council on Foreign Relations. However, they can also lead to trade wars and higher consumer costs.
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Why Has Donald Trump Called for EU and UK Tariffs?
According to the BBC, Trump told journalists on Sunday that tariffs on E.U. goods imported into the U.S. might come into force "pretty soon."
He reportedly said: "They don't take our cars, they don't take our farm products, they take almost nothing and we take everything from them. Millions of cars, tremendous amounts of food and farm products."
His call for tariffs on the E.U. therefore seems to stem from America's long-standing trade deficit with the union, which is when a country imports more than it exports creating an imbalance.
According to Eurostat, in 2023, the U.S. was the country which imported the most goods from the E.U. Per the outlet, 20 E.U. member states exported more to the U.S. than they imported from it in 2023. Germany had the largest trade surplus, followed by Italy and Ireland.
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Will Trump Impose Tariffs on the UK?
On trade with the U.K., Trump said on Sunday that the country has been "out of line," according to the BBC, but he added that the issues could be "worked out."
Trump also described his relationship with the British Prime Minister, Sir Keir Starmer, as "very nice."
He said: "We've had a couple of meetings. We've had numerous phone calls. We're getting along very well."
U.S. trade with the U.K. has been slightly more balanced than with the E.U. as, according to data from the Office of the United States Trade Representative, America was in a trade surplus with the United Kingdom in 2022.
This balance shifted in Britain's favor in 2023, according to the U.K.'s Office for National Statistics, and Britain also had a trade surplus with the U.S. at the end of the third quarter in 2024, according to data from the London's Department for Business and Trade.
The slightly more equal trade between the U.K. and the U.S. could be the reason Trump said that issues with the country might be resolved, avoiding potential tariffs.
What Will the Impact Be?
Washington's hints already started to have an impact on the stock market, with shares in some of the biggest European carmakers dropping by a significant amount on Monday morning, Reuters reported.
As the BBC reported, higher taxes on imports from the U.S. will make it more difficult for companies to sell goods in the world's largest economy.
This also comes at a bad time for the E.U., according to CNBC, as the eurozone has been struggling economically.
Trump's Tariffs on Canada, Mexico and China
Over the weekend, Trump placed 25-percent duties on Canadian and Mexican imports, along with a 10-percent tariff on China.
For Canada and Mexico, the tariffs came as part of the president's strategy to pressure them into addressing illegal immigration and drug trafficking.
Both countries have slammed the move—Canada has responded with its own tariffs on U.S. imports and Mexico has threatened to follow suit, according to CNBC.
Regarding China, Trump has framed the decision around stopping the flow of drugs like fentanyl, a powerful opioid, into the country, as well as to stymie illegal immigration.
The move by Trump prompted China's Commerce Ministry to say in a statement on Sunday that the new Republican administration's "unilateral imposition of tariffs is a serious violation of WTO rules," referring to the Switzerland-headquartered World Trade Organization tasked with smoothing international trade.
What People Are Saying
Starmer said on Sunday, according to The Associated Press: "In the discussions that I have had with President Trump, that is what we have centered on, a strong trading relationship. So it is very early days."
British Business Secretary Jonathan Reynolds told the BBC: "We know this is something that not just President Trump, but the whole of his administration takes very seriously.
"We've obviously got a services-based economy. The U.S. does not have that deficit with us so if that's the logic of that position, I think we've got an argument to engage with."
What's Next
It is still uncertain when or if Trump will bring about tariffs on the E.U., or the U.K., and Starmer is heading to Brussels on Monday to discuss the region's defense strategy, according to CNBC. The meeting will likely also include conversations about the risk of a trade war.
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