Trump threatens EU, Mexico with 30% tariff rate

President Trump on Saturday posted letters threatening the European Union and Mexico with 30% tariffs as of August 1.Why it matters: Trump has reverted to the fully aggressive trade posture he took in early April, with a stable economy at his back and financial markets showing no signs of stopping him. Just as in April, investors say the tariffs he's rolled out this week are substantially higher than markets expected — but unlike April, stocks are exploring new highs, not new lows, while bonds remain tranquil. What they're saying: In separate letters posted on Truth Social on Saturday, Trump said that the U.S. would implement tariffs of 30% on U.S.-bound goods from Mexico and Europe.In the case of Europe, the letter disrupts the talks between the two nations aimed at landing a deal this month. Trump's threat for higher levies on Mexican goods escalates trade tensions across North America, which the White House has used to try to pressure Mexico and Canada to tighten up border controls.Between the lines: The letter to Europe seems to include a sort of command to Europe to drop its tariffs, an apparent condition of any future deal."The European Union will allow complete, open Market Access to the United States, with no Tariff being charged to us, in an attempt to reduce the large Trade Deficit," Trump wrote. Catch up quick: Trump has sent dozens of trade letters this week, unilaterally imposing rates on partners large and small as of next month.But those letters have gotten more agitated as the week's gone on, threatening Brazil with a 50% levy if it doesn't end the criminal trial of ally Jair Bolsonaro, and targeting Canada with a 35% levy. The intrigue: Canada got a higher tariff rate than Mexico, with both letters citing fentanyl flows, even though government data shows the amount of fentanyl seized at the Mexican border in May was more than 20x the seizures at the Canadian border."Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough. Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground," Trump wrote in the letter addressed to Mexico president Claudia Sheinbaum.Friction point: Trump's letter to Mexico says the blanket tariff is "separate" from existing sectoral tariffs, though it's not clear if that means they would stack on each other or not.The letter is also silent on the issue of goods compliant with the existing USMCA free-trade agreement; earlier this year those goods were exempted from blanket tariffs.The White House did not immediately respond to requests for comment.What to watch: Trump told NBC News on Thursday he was preparing blanket tariffs on other nations as high as 20%, double the global baseline tariff he imposed in April. That baseline tariff, plus sectoral levies on steel and aluminum, have helped the government generate nearly $30 billion a month in new revenue.He also this week announced a 50% copper tariff, which risks causing a surge for one of the economy's most vital metals. Editor's note: This is a developing story.

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