Published by Global Banking and Finance Review
Posted on February 26, 2025
By David Lawder and Andrea Shalal
WASHINGTON (Reuters) - U.S. President Donald Trump on Wednesday raised hopes for another month-long pause on steep new tariffs on imports from Mexico and Canada, saying they could take effect on April 2, and floated a 25% "reciprocal" tariff on European cars and other goods.
A White House official, however, said Trump's previous March 4 deadline for the 25% tariffs on Mexican and Canadian goods remained in effect "as of this moment," pending his review of Mexican and Canadian actions to secure their borders and halt the flow of migrants and the opioid fentanyl into the U.S.
Trump sowed confusion during his first cabinet meeting on Wednesday, when he was asked about the timing for the start of the duties for Canada and Mexico and replied that it would be April 2.
"I have to tell you that, you know, on April 2, I was going to do it on April 1," Trump said. "But I'm a little bit superstitious, I made it April 2, the tariffs go on. Not all of them but a lot of them."
Trump's comments prompted jumps in the value of the Canadian dollar and Mexican peso versus the greenback.
Canadian Innovation Minister Francois-Philippe Champagne told reporters that Canada would wait for signed executive orders from Trump before reacting.
"Our mission is still to avoid the tariffs, extend the suspension if we need to," Champagne said. "We are prepared - there will be a targeted, strategic but a firm response" if Trump imposes tariffs.
Mexico's Economy Ministry declined to comment on Trump's remarks, but said Economy Minister Marcelo Ebrard will meet on Thursday with newly confirmed U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick on Friday.
Lutnick told the cabinet meeting that the fentanyl-related actions were paused for 30 days but referred to "overall" tariffs on April 2. He did not specify whether the March 4 deadline remained in effect.
"So the big transaction is April 2, but the fentanyl-related things, we're working hard on the border," Lutnick said. "At the end of that 30 days, they have to prove to the president that they've satisfied him in that regard. If they have, he'll give them a pause, or he won't."
EU TARIFF RATE
Trump has targeted early April for imposing reciprocal tariffs matching import duty rates of other countries and offseting their other restrictions. His trade advisers consider European countries' value added taxes to be akin to a tariff.
Trump, asked whether he has decided on a tariff rate for goods from the European Union, replied: "We have made a decision, and we'll be announcing it very soon, and it'll be 25%, generally speaking, and that'll be on cars, and all of the things."
He said the EU is a "different case" from Canada and takes advantage of the U.S. in different ways.
"They don't accept our cars. They don't accept, essentially our farm products," Trump said, adding that the EU was formed "in order to screw the United States."
A European Commission spokesperson said the EU "will react firmly and immediately against unjustified barriers to free and fair trade," including for tariffs that challenge legal and non-discriminatory policies.
"The European Union is the world's largest free market. And it has been a boon for the United States," the spokesperson said.
Roberta Metsola, president of the European Parliament, was planning to meet with U.S. lawmakers in Washington on Wednesday, but not with any Trump administration officials.
NEW USTR CONFIRMED
Also on Wednesday, the U.S. Senate voted 56-43 to confirm Greer as U.S. Trade Representative, putting a veteran of the Republican president's first-term trade wars fully on the job.
Greer, who served as chief of staff to former USTR Robert Lighthizer, won the support of five Democrats, including both senators from Michigan, the center of the U.S. auto industry.
Trade groups welcomed Greer's confirmation, lauding his commitment to consulting with industry and standing up for U.S. businesses, farmers and workers. "We share Ambassador Greer's desire for an active and pragmatic trade policy that creates U.S. jobs and more resilient supply chains," said Jake Colvin, president of the National Foreign Trade Council.
Greer told senators during his Senate confirmation hearing that he wanted to quickly renegotiate the U.S.-Mexico-Canada Agreement on trade to ensure China does not use it as a back door to the U.S. market to avoid other tariffs.
"Right out of the gate, I expect that we'll be taking a second look at the USMCA," Greer said.
Asked what changes he would like to see in the pact, Greer zeroed in on further tightening automotive content rules.
"I think we should look at the rule of origin for automobiles and aerospace and other things to look and see if we need to have any kind of restriction on content or value added from foreign countries of concern, or non-market economies," he said, using language that U.S. trade officials often use to describe China.
(Reporting by David Lawder and Andrea Shalal; additional reporting by Bo Erickson in Washington and Ryan Jones in Toronto; Brendan O'Boyle, Raul Cortes and Sarah Morland in Mexico City; Ismail Shakil and David Ljunggren in Ottawa; and Andrew Gray in Brussels; Editing by Dan Burns, David Gregorio and Paul Simao)
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