Trump tariffs of 25% "in most cases" could soon be imposed on imports from European Union countries, President Donald Trump told reporters on Wednesday, undercutting an S&P 500 rally. Trump specifically mentioned autos, which isn't a new threat, but he added "all other things" also would face tariffs.
Some of the threats are overlapping. It's not clear whether today's threat implies that the reciprocal tariffs he announced on Feb. 13 will neatly add up to 25% for most EU countries. Trump also has said he plans to impose 25% tariffs on imports of autos, pharmaceutical products and semiconductors as soon as April 2. EU countries are big exporters of auto and prescription drugs to the U.S.
What is clear is that threats to impose Trump tariffs keep mounting, and it's looking less likely that this is all a negotiation ploy.
Trump Tariff Deadlines Loom
Trump said on Tuesday that tariffs on imports from Mexico and Canada "will go forward" when a 30-day reprieve expires next week. His plan involves 25% tariffs on imports from Mexico and Canada, except for a 10% rate on energy imports from Canada.
Trump signed an executive order that will subject all steel and aluminum imports, roughly $50 billion worth, to 25% tariffs, effective March 12.
Trump's reciprocal tariff executive order would apply tariffs based on the tariffs other nations apply to U.S. goods, as well as other policies that contribute to trade imbalances. Those would include government subsidies, value-added taxes and currency valuations. Reciprocal Trump tariffs could be set by early April.
U.S. Trade Deficit With The EU
Trump told reporters that the U.S. has about a $300 billion trade deficit with the European Union. That's not quite right. The U.S. had a $235.6 billion deficit in goods trade last year with the EU. However, the U.S. runs a roughly $75 billion surplus in services trade with the EU.
S&P 500 Backs Off
The S&P 500, which rose as much as 0.75% intraday to briefly retake the 50-day line, reversed lower after Trump's expanded EU tariff threat before moving back to fractionally higher in Wednesday stock market action. The S&P 500 is trying to avoid extending its losing steak to five sessions.
The Trump tariffs threat against Europe helped pushed the 10-year Treasury yield down to 4.25%, which would be the lowest close since Dec. 10.
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