This morning, President Trump took to Truth Social to make a recommendation regarding tariffs levied on the European Union. This would mark a significant increase from proposed tariffs, which include a 10% baseline tariff with 20% reciprocal tariffs, that were set on April 10th but later delayed for all tariffs (except China) until July 9th. President Trump also proposed a 200% tariff on alcohol products, including wine and champagne.
President Trump stated that the European Union was formed “for the primary purpose of taking advantage of the United States on TRADE” and “has been very difficult to deal with.”
The post states:
The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with. Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable. Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States. Thank you for your attention to this matter!
The Value Added Tax is a barrier to the importation of US goods in the EU and often ranges from 15-25%. The VAT is paid by the importer, so there is no cost inflicted on U.S. companies, however, it significantly hampers the competitiveness of foreign goods in the EU marketplace.
For example, the EU imported approximately 116,000 U.S. cars in 2022, according to the BBC. This is almost half as many U.S. cars imported in 2018 when that number was around 267,000, according to the European Automobile Manufacturers Association.
Meanwhile, the U.S. imported 1,155,000 cars from the EU in 2018 and 692,000 in 2022, despite the EU having approximately 100 million more people than the U.S.
Just hours before the proposal to increase tariffs on the EU, President Trump offered praise to the United Kingdom, saying “our negotiated deal…is working out well for all,” while also recommending the UK incentivize drilling in the North Sea in order to offset energy costs.
This morning, Treasury Secretary Scott Bessent told FOX News that both he and President Trump believe “the EU proposals have not been of the same quality that we’ve seen from our other important trading partners.”
Bessent said that he hopes this proposal “lights a fire under the EU” to negotiate, noting that they have a “collective action problem” in that they’re 27 countries represented by just one group in Brussels and that “the underlying countries don’t even know what the EU is negotiating on their behalf.”
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