US President Donald Trump has vowed to hit the European Union with tariffs and says his administration is discussing a 10 per cent punitive duty on Chinese imports because fentanyl is being sent from China to the US via Mexico and Canada.
Trump voiced his latest tariff threats in remarks to reporters at the White House a day after taking office, without immediately imposing tariffs as he had promised during his campaign.
Financial markets and trade groups exhaled briefly on Tuesday, but his latest comments underscored Trump's longstanding desire for broader duties and a new February 1 deadline for 25 per cent tariffs against Canada and Mexico, as well as duties on China and the EU.
Trump said the EU and other countries also had troubling trade surpluses with the US.
"The European Union is very, very bad to us," he said, repeating comments made on Monday.
"So they're going to be in for tariffs. It's the only way ... you're going to get fairness."
Trump said on Monday that he was considering imposing the duties on Canada and Mexico unless they clamped down on the trafficking of illegal migrants and fentanyl, including precursor chemicals from China, across their US borders.
Trump had previously threatened a 10 per cent duty on Chinese imports because of the trade, but realigned that with the February deadline.
White House trade adviser Peter Navarro told CNBC said early on Tuesday that Trump's Canada and Mexico tariff threat was to pressure the two countries to stop illegal migrants and illicit drugs from entering the US
"The reason why he's considering 25, 25 and 10 (per cent), or whatever it's going to be, on Canada, Mexico and China, is because 300 Americans die every day" from fentanyl overdoses, Navarro said.
Canada's outgoing prime minister Justin Trudeau is confident Canada can avoid the 25 per cent tariffs.
Trudeau said Canada will retaliate if needed but noted Canada has been here before during the first Trump presidency when they successfully renegotiated the free trade deal.
"Trump wants to usher in a golden age for the US," Trudeau said at a cabinet retreat in Quebec called to deal with Trump's threats.
"If the American economy is going to see the boom that Donald Trump is predicting they are going to need more energy, more steel and aluminium, more critical minerals, more of the things that Canada sells to the United States every single day."
Trump on Monday signed a broad trade memorandum ordering federal agencies to complete comprehensive reviews of a range of trade issues by April 1.
These include analyses of persistent US trade deficits, unfair trade practices and currency manipulation among partner countries, including China.
Trump's memo asked for recommendations on remedies, including a "global supplemental tariff," and changes to the $US800 ($A1276) duty-free exemption for low-value shipments often blamed for illicit imports of fentanyl precursor chemicals.
The reviews ordered create some breathing room to resolve reported disagreements among Trump's cabinet nominees over how to approach his promises of universal tariffs and duties on Chinese goods of up to 60 per cent.
Trump's more measured approach to tariffs fuelled a rally in US stocks that pushed the benchmark S&P 500 index to its highest level in a month, though Trump's new salvo on China and the European Union may deflate that momentum.
Trump likely "decided to go a little slower and also to make sure he has as firm a legal foundation as he can get for these kinds of actions," said William Reinsch, a trade expert at the Center for Strategic and International Studies in Washington.
"He's figuring out how to best use his leverage to get what he wants."
https://au.finance.yahoo.com/news/capitol-prisoners-free-trumps-first-144907111.html
