U.S. President Donald Trump addresses the press in the Oval Office at the White House in Washington, D.C., on March 26, 2025.
Evelyn Hockstein | Reuters
U.S. President Donald Trump has warned of imposing “significantly higher” tariffs on the European Union (EU) and Canada if they collaborate to challenge U.S. trade tariffs.
“If the European Union collaborates with Canada to inflict economic damage on the USA, substantial Tariffs, much larger than what is currently planned, will be imposed on both to safeguard the best friend that each of these two nations has ever had!,” Trump expressed in a Truth Social post on Thursday.
On Wednesday, the President announced that a 25% tariff would be placed on “all cars not manufactured in the United States,” with these tariffs expected to take effect on April 2.
Will Scharf, a Trump White House aide, noted that these new tariffs target “foreign-made cars and light trucks,” and will be added to existing tariffs. He estimated that this initiative could generate “over $100 billion in new annual revenue” for the U.S.
The new measures have led to volatility in global markets, as a new front in the escalating global trade conflict emerged, causing shares of U.S. and Asian automakers to decline following the announcement, with European auto manufacturers anticipated to follow suit when markets reopen on Thursday.
Trump has already disrupted established global trade relations by implementing import duties on goods from Mexico, Canada, and China, as well as levies on all steel and aluminum imports, due to perceived unfair trade deficits with several of the U.S.’s largest trading partners.
Although the EU and Canada have yet to respond jointly to accuse the U.S. of economic harm as suggested by Trump, both have indicated potential retaliation against these latest tariffs.
European Commission President Ursula von der Leyen emphasized that the EU “will keep pursuing negotiated solutions while protecting its economic interests.”
“Tariffs are taxes — detrimental to businesses and even worse for consumers, both in the U.S. and the European Union,” she stated in a comment.
Canada’s new Prime Minister Mark Carney referred to Trump’s actions as “a direct assault” and announced he would hold a high-level cabinet meeting on Thursday to formulate a response.
“We will protect our workers, our companies, our country, and we will do so united,” he asserted in Kitchener, Ontario, according to Reuters.
— Reporting contributed to this story by CNBC’s Kevin Breuninger and Eamon Javers.
