Trump sows confusion on tariffs for Canada and Mexico, floats 25% duty for EU goods

WASHINGTON - US President Donald Trump on Feb 26 raised hopes for another month-long pause on steep new

tariffs on imports from Mexico and Canada,

saying they could take effect on April 2, and floated a 25 per cent “reciprocal” tariff on European cars and other goods.

A White House official, however, said Mr Trump’s previous March 4 deadline for the 25 per cent tariffs on Mexican and Canadian goods remained in effect “as of this moment”, pending his review of Mexican and Canadian actions to secure their borders and halt the flow of migrants and the opioid fentanyl into the US.

Mr Trump sowed confusion during his first Cabinet meeting on Feb 26, when he was asked about the timing for the start of the duties for Canada and Mexico and replied that it would be April 2.

“I have to tell you that, you know, on April 2, I was going to do it on April 1,” Mr Trump said. “But I’m a little bit superstitious, I made it April 2, the tariffs go on. Not all of them but a lot of them.”

Mr Trump’s comments prompted jumps in the value of the Canadian dollar and Mexican peso versus the greenback.

Canadian Innovation Minister Francois-Philippe Champagne told reporters that Canada would wait for signed executive orders from Mr Trump before reacting.

“Our mission is still to avoid the tariffs, extend the suspension if we need to,” Mr Champagne said.

He added that “we are prepared – there will be a targeted, strategic but a firm response” if Mr Trump imposes tariffs.

Mexico’s Economy Ministry declined to comment on Mr Trump’s remarks, but said Economy Minister Marcelo Ebrard had a meeting on Feb 27 with newly confirmed US Trade Representative Jamieson Greer, and Commerce Secretary Howard Lutnick on Feb 28.

Mr Lutnick told the Cabinet meeting that the fentanyl-related actions were paused for 30 days but referred to “overall” tariffs on April 2. He did not specify whether the March 4 deadline remained in effect.

“So the big transaction is April 2, but the fentanyl-related things, we’re working hard on the border,” he said. “At the end of that 30 days, they have to prove to the President that they’ve satisfied him in that regard. If they have, he’ll give them a pause, or he won’t.”

EU tariff rate

Mr Trump has targeted early April for imposing reciprocal tariffs that would match the import duty rates of other countries and offset their other restrictions.

Mr Trump, asked whether he has decided on a tariff rate for goods from the European Union, replied: “We have made a decision, and we’ll be announcing it very soon, and it’ll be 25 per cent, generally speaking, and that’ll be on cars, and all of the things.”

He said the EU is a “different case” from Canada and takes advantage of the US in different ways. “They don’t accept our cars. They don’t accept, essentially our farm products,” Mr Trump said, adding that the EU was formed “in order to screw the United States”.

A European Commission spokesperson said the EU “will react firmly and immediately against unjustified barriers to free and fair trade”, including for tariffs that challenge legal and non-discriminatory policies.

“The European Union is the world’s largest free market. And it has been a boon for the United States,” the spokesperson said.

Ms Roberta Metsola, president of the European Parliament, was planning to meet US lawmakers in Washington on Feb 26, but not any Trump administration officials.

New USTR confirmed

Also on Feb 26, the US Senate voted 56-43 to confirm Mr Greer as Mr Trump’s new US Trade Representative (USTR), putting a veteran of the Republican President’s first-term trade wars on the job.

Mr Greer, who served as chief of staff to former USTR Robert Lighthizer, won the support of five Democrats, including both senators from Michigan, the centre of the US auto industry.

Trade groups welcomed Mr Greer’s confirmation, lauding his commitment to consulting with industry and standing up for US businesses, farmers and workers.

“We share Ambassador Greer’s desire for an active and pragmatic trade policy that creates US jobs and more resilient supply chains,” said National Foreign Trade Council president Jake Colvin.

Mr Greer said during his Senate confirmation hearing that he wanted to quickly renegotiate the US-Mexico-Canada Agreement (USMCA) on trade to ensure China does not use it as a back door to the US market to avoid other tariffs.

“Right out of the gate, I expect that we’ll be taking a second look at the USMCA,” he said.

Asked what changes he would like to see in the pact, Mr Greer zeroed in on further tightening automotive content rules.

“I think we should look at the rule of origin for automobiles and aerospace and other things to look and see if we need to have any kind of restriction on content or value-added from foreign countries of concern, or non-market economies,” he said, using language that US trade officials often use to describe China. REUTERS