Update from February. 3, 2025 to 4:59 p.m. Eastern: Prime Minister Justin Trudeau says that the American prices on Canada will be “interrupted” for 30 days. Learn more about the announcement here.
European leaders were preparing to American prices Monday after the American president Donald Trump Imposed scanning samples in Mexico, Canada and China that will affect billions of dollars in commerce, market rotation and global currencies.
Trump said the prices against the three largest American trade partners, who take effect on Tuesday, could cause short-term American pains, but “in the long term, the United States has been torn by practically all countries in the world “.
The world’s stock markets and the currencies fell on Monday by fearing that the prices will trigger an economically damaging trade war. The STOXX 600 pan -European index fell 1.3% in the morning trade, taking place for its largest day slide this year and the term contracts for the S&P 500 of Wall Street fell 1.4 %.
Speaking in his field Mar-A-Lago in Florida on Sunday, Trump said that the European Union of 27 countries would be the next in the shooting line, but did not say when.
“They don’t take our cars, they don’t take our agricultural products. They take almost nothing and we take everything, “he told journalists.
EU leaders meeting at an informal summit in Brussels on Monday said that Europe would be ready to retaliate if the United States imposed prices, but also called for reason and negotiation.
Arriving at talks, French president Emmanuel Macron said that if the EU was attacked in his commercial interests, he should “respect and react”. He added that recent statements in the United States pushed Europe to be stronger and more united.
Chancellor Olaf Scholz in Germany, the greatest EU economy which depends strongly on exports, also said that the block could respond if necessary with its own prices against the United States, but stressed that it was better For both to find a trade agreement.
Luxembourg Prime Minister Luc Frieden said, “I think the prices are still bad. The prices are bad for trade. Prices are bad for the United States. »»
Trump suggested that Great Britain, who left the EU in 2020, could be spared prices, saying: “I think we can be developed.”
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The United States is the largest EU business and investment partner and has constantly imported more goods than they have exported to the block. The American trade deficit of goods amounted to 155.8 billion euros (161.6 billion dollars) in 2023, according to Eurostat data.
However, in the services, the United States had an excess exports on imports with the EU of 104 billion euros.
EU foreign policy chief Kaja Kallas said there were no winners in a trade war, saying that if one had broken out between Europe and the United States, ” So the one who laughs on the side is China. “
Prices on Canada, Mexico and China, described in three decrees, should take effect at 12:01 p.m. on Tuesday.
Trump said he would speak on Monday with the leaders of Canada and Mexico, who both announced their own reprisals, but have minimized expectations that they are changing.
“They owe us a lot of money, and I’m sure they are going to pay,” Trump told journalists.
Economists have said that the Republican President’s plan to impose 25% tariffs in Canada and Mexico and that ten% tariffs in China are slowing global growth and would increase the prices of Americans.
Trump says they are necessary to curb immigration and drug trafficking and stimulating national industries.
The financial market reaction reflected concerns on Monday concerning the fallout from a trade war. Tokyo’s shares ended the day down almost three percent and the reference of Australia – often a proxy trade for Chinese markets – dropped by 1.8%. The continental China market has been closed for the New Year’s lunar holidays.
The Chinese yuan, the Canadian dollar and the Mexican peso have all collapsed against a dollar arrow. With Canada and Mexico, the main sources of US burden of crude oil, US oil prices CLC1 have jumped by more than 1%, while RBC1’s term contracts have increased by almost three%.
Trump prices will cover almost half of all American imports and force the United States to more than double its own manufacturing production to fill the gap – a short -term impracticable task, analysts of ingenants wrote.
Other analysts have said that prices could throw Canada and Mexico into the recession and trigger “stagflation” – high inflation, stagnant growth and high unemployment – at home.
In Europe, Deutsche Bank economists have said they are currently taking a 0.5% stroke of the gross domestic product (GDP) if Trump imposed ten percent rates on the block.
An information sheet of the White House has not given any details on what Canada, Mexico and China should do to win a stay.
Trump has promised to keep them in place until he describes as a national emergency on fentanyl, a deadly opioid and illegal immigration to the United States ends.
China has called the fentanyl america problem and said it would challenge the World Trade Organization for other countermeasures, but also left the door open to the interviews.
Mexican president Claudia Sheinbaum promised resilience and said that she would provide more details on the reprisals she ordered on the weekend on Monday. Canada said it would take legal action under the international organizations concerned to challenge the prices.
Car manufacturers would be particularly affected, with new prices on vehicles built in Canada and Mexico, in charge of a large regional supply chain where the parts can cross borders several times before the final assembly.
The actions of Volkswagen Vowg_P.de, BMW BMWG.de, Porsche P911_P.de, Stellantis Stlam.MI and Truckmaker Daimler Truck Dtggge.de all dropped from about five to six in European trade on Monday.
Investment Bank Stifel analysts estimated that eight billion euros in VW income would be affected by prices and 16 billion euros in Stellantis.
The actions of American Big Tech actions were also lower in front of the US Open, with Microsoft, Alphabet, Amazon and Apple down between 1.5% and two percent.
Trump only imposed ten percent function on energy products.