US president Donald Trump has threatened to slap 25 per cent tariffs on imports from the European Union (EU), as he lashed out at the bloc, saying it “was formed to screw the United States”.
The remarks came during the first cabinet meeting of Mr Trump’s second term on Wednesday, which featured an appearance by Elon Musk, the billionaire whom the US president has charged with slashing government spending.
“We have made a decision and we’ll be announcing it very soon,” Mr Trump said when questioned about his plans for EU tariffs. “It’ll be 25 per cent generally speaking, and that will be on cars and all other things.”
Mr Trump’s comments raise the prospect of a broad transatlantic trade war that could hurt both the US and European economies and inflict greater damage on frayed diplomatic ties among the western allies.
Across the board US tariffs would hit Irish exports to the US, though a lot will depend on the detail of what the Trump administration announces.
Ireland exported €72.6 billion to the US last year making it the State’s single biggest export market for goods. By far the biggest export category is pharmaceutical products, which the US president has already identified as a target for a specific tariff programme – it is not clear whether any products in this category would be hit by general tariffs aimed at the EU.
Other Irish exporters in sectors like food and drink also stand to be hit, with tariffs making it much more difficult for them to sell into the US market.
Ireland is one of the EU countries most exposed to US tariffs and would also be at risk from the outbreak of a trade war between the US and the EU. The State has a €50 billion trade surplus with the US which has caught the attention of the Trump administration, which claims it is a sign of unfair trade practices.
Mr Trump is separately preparing to implement 25 per cent tariffs on Canada and Mexico as the White House tries to rein in what it said was undocumented immigration and fentanyl trafficking.
Despite MrTrump’s promises to impose tariffs on those two countries as well as China from day one of his presidency, only measures against Beijing have taken effect.
[ Here’s what a deal to avoid Trump’s tariffs on Irish pharma would look likeOpens in new window ]
During his first term, the US president also threatened several tariffs that failed to materialise.
On Wednesday, Mr Trump said that the levies on Canada and Mexico would take effect on April 2nd, suggesting a possible delay in the moves, which were slated to be imposed next week.
But as Mr Trump spoke, Howard Lutnick, the commerce secretary, intervened to note that America’s neighbours still had to satisfy the president’s demands on fentanyl, suggesting they might still take effect next week.
“It’s going to be hard to satisfy,” Mr Trump said after Mr Lutnick jumped into the discussion.
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Mr Trump’s broadside against the EU comes just two days after he hosted French president Emmanuel Macron at the White House for a meeting that included a discussion about trade in addition to the peace talks in Ukraine.
Sir Keir Starmer, prime minister of the UK, which has left the EU, will meet Mr Trump in Washington on Thursday.
The president did not offer any new details of his proposed tariffs on the EU, including what authority he would use, but renewed his fierce attacks on the bloc for what he has long perceived as an unbalanced economic relationship.
“They’ve really taken advantage of us in a different way. They don’t accept our cars. They don’t accept essentially our farm products, they use all sorts of reasons why not,” he said.
“Let’s be honest, the European Union was formed in order to screw the United States. That’s the purpose of it. And they’ve done a good job of it.”
The formation of the bloc was encouraged by Washington in the aftermath of the second World War to deepen economic integration and make conflict less likely.
The euro fell slightly following Mr Trump’s comments, trading 0.2 per cent lower against the dollar at $1.049.
Auto groups, which would be heavily affected by the proposed tariffs on US imports from both Canada and Mexico as well as the EU, have warned that vehicle demand would be hurt as consumers are forced to pay higher prices if a 25 per cent tariff on imported cars is imposed.
“Consumers will not be able to absorb the increase in vehicle prices and volumes will decline,” said a chief executive of a major European auto parts supplier. “The industry is already in a fragile position and this massive uncertainty is already slowing down deals, investments and allocation of capital.”
During Wednesday’s cabinet meeting, Mr Musk defended his efforts to cut federal government spending, saying that “America will go bankrupt” without his team’s interventions. – Copyright The Financial Times Limited 2025
