US president Donald Trump has said he intends to move ahead with plans on Saturday to impose 25 per cent tariffs on Mexico and Canada and a 10 per cent levy on China and has confirmed that the EU is on his list of future targets. Depending on the details, US tariffs on imports from the EU could seriously hit Irish exports to the American market, including multi-billion euro annual sales of pharmaceutical products.
Trump had threatened the tariffs on Mexico and Canada over what he says is a failure to crack down on the flow of undocumented migrants and illegal drugs across US borders and says he will now go ahead on Saturday.
On Friday the White House confirmed that the tariffs on Canada, Mexico and China would go ahead on Saturday. Later, in a briefing in the White House, Trump also dramatically widened the threat to the EU which he said had treated the US “very badly”.
“Am I going to impose tariffs on the European Union? Absolutely,” Trump said. He pointed to the big deficit in trade the US has with the EU and said “we’ll be doing something very substantial with the European Union”. He did not give further details, but there is now a prospect of a widening global trade war as countries on which the US impose tariffs respond. Canada, Mexico and China are all likely to respond.
It is not clear what shape the tariffs on the EU will take – and this be of vital interest to Ireland. In his press briefing Trump spoke of tariffs on steel and aluminium, which he imposed during his first term. However, in a reference which will cause concern in Dublin, he also said he planned to impose tariffs on pharmaceutical imports into the US. This is by far the largest area of Irish exports to the US market and any move to impose tariffs would threaten Irish jobs and tax revenues. Many major US pharma companies export back to the US market from their Irish operations.
Ireland would also be hit if a full-scale trade war erupts between the EU and US, which would be likely to damage growth and push up inflation.
The tariffs would mark the first wave of trade levies in Trump’s new term and their impact will ripple well beyond Canada and Mexico as other nations brace for the possibility they may be targeted next and as US businesses await possible retaliatory measures.
Trump campaigned on a pledge to impose sweeping tariffs abroad as part of an expansive agenda that aims to reshape the US economy and its ties with other nations. But the first two weeks of his term spurred uncertainty over whether he would follow through, with some leaders speculating that his threats were intended to just buy him leverage.
Trump has also already ordered up reports, due April 1st, on overall trade issues and tariffs, that could lead him to trigger new levies or to quit the continental trade pact he renegotiated with Canada and Mexico in his first term. That agreement is up for review in 2026.
Trump is also promising sectoral tariffs, such as on pharmaceuticals, semiconductor chips, steel, aluminium and copper, which could apply widely to many countries. He has also ordered his administration to investigate whether China complied with a trade deal struck in his first term, setting the stage for tariffs against the world’s second largest economy.
Trump’s 25 per cent tariff against two major trading partners and export markets for the US threatens to have dramatic economic consequences and potentially launch a trade war by undermining protections from the US-Mexico-Canada free trade agreement. Earlier this week, Trump suggested that the 25 per cent rate could be a baseline and that the tariffs could increase.
In the first 11 months of 2024, US trade with Canada totalled $699 billion and $776 billion with Mexico. Economists warn a trade war would raise the cost of imported materials used by US manufacturers, hike prices for American consumers and redirect or reduce trade flows. The 25 per cent rate Trump has set for the North American countries would likely have stark impacts on particular sectors, such as the auto and energy industries. – Bloomberg and agencies. Additional reporting Irish Times staff
