President Trump has announced a 30% tariff on goods from the European Union and Mexico, set to begin August 1. The letters went out Saturday morning. The EU was notified in advance. Mexico was briefed the day before. This wasn’t a surprise. It was a setup. The market already priced it in. Futures barely blinked. Traders expect Monday to open flat or green.
The tariff letters cite trade deficits and national security. Trump’s message to the EU calls the imbalance “persistent” and “non-reciprocal.” Mexico’s letter references fentanyl and cartel activity. The administration says these tariffs are separate from sectoral rates. They apply broadly. Goods rerouted to dodge the tariff will still be hit.
The EU exported over $600 billion in goods to the US last year. Mexico sent more than $500 billion. Together, they account for nearly one third of total US imports. The 30% rate is steep, but it’s not final. Negotiations are ongoing. The EU has signaled willingness to talk. Mexico has already opened a binational working group. Both sides are aiming to avoid escalation.
The market sees this for what it is. A bargaining chip. Not a shock. Not a policy shift. Just leverage. Trump has used this tactic before. In April, he imposed global tariffs, then paused them for 90 days. That window just closed. Now the letters are flying again. But the tone is familiar. The goal is deals, not disruption.
The EU and Mexico are expected to respond. Countermeasures are on the table. But the language remains diplomatic. No one wants a trade war. Everyone wants a deal. The market knows that. That’s why it’s not flinching.
Sources
https://www.cnbc.com/2025/07/12/trump-tariffs-european-union-eu-mexico-trade.html
https://www.forbes.com/sites/alisondurkee/2025/07/12/trump-imposes-30-tariffs-on-eu-and-mexico/