Washington. U.S. President Donald Trump announced on Saturday a 30 percent tariff increase targeting Mexico and the European Union ( EU).

In a formal letter posted on his Truth social platform, President Trump said that both tax announcements will come into effect from August 1. President Trump cited Mexico’s role in the flow of illicit drugs into the United States and the trade imbalance with the EU as the reasons for the increase in tariffs.

The EU has strongly criticised the announcement, warning it would disrupt supply chains, but said it would continue negotiating the deal ahead of the deadline.

Since returning to office in January, Trump has increased taxes targeting his rivals and allies. It has devastated financial markets and raised fears of a global recession.

The Trump administration is pressuring trading partners to secure agreements before the tax enforcement date.

So far, U.S. officials have signed only two agreements with Britain and Vietnam, and temporarily reduced-for-tat taxes with China.

The new tariffs for Mexico announced by Trump will exceed the 25 percent tax imposed on Mexican goods earlier this year, although products entering the United States are exempted under the U.S.-Mexico-Canada Agreement (USMCA).

“Mexico is helping me secure the border, but what Mexico has done is not enough,” Trump said in a letter to Mexican President Claudia Shenbaum.

“Starting August 1, 2025, we will impose a 30 percent additional tax on Mexican products shipped to the United States. ’

The EU’s tariffs are also much higher than trump’s 20 percent tax announced in April while negotiations with the European Union continue.

Disruption of supply chain

European Commission chief Ursula von der Leyen said in a statement: “A 30 per cent tax on EU exports will disrupt the transatlantic supply chain needed to harm businesses, consumers and patients on both sides of the Atlantic Ocean.” ’

“We are ready to work on the deal by August 1,” she said. At the same time, we will take all necessary steps to protect the interests of the EU, including measures to adopt proportionate countermeasures if necessary. ’

The European Union and dozens of other economies were set to raise U.S. tariffs from the baseline of 10 percent on Wednesday, but Trump postponed the deadline until August 1.

Earlier this week, Trump has sent letters to more than 20 countries imposing an updated fee for each, including a 35 percent tax for Canada. A U.S. official told AFP that the USMCA exemption was expected to remain for Canada.

Brussels said on Friday it was ready to reach a deal with Washington to prevent a 20 percent tax refund.

The EU was preparing to impose retaliatory tariffs on about 21 billion euros of U.S. goods after Trump imposed separate tariffs on steel and aluminum imports earlier this year.

European authorities have not taken any steps to extend the suspension but can do so soon if necessary.

Josh Lipsky, president of international economics at the Atlantic Council, said, “Despite all the movements for a deal, this threat shows that the EU is surrounded by uncertainty like almost every country in the world.” ’

“The road ahead depends on how the EU responds, and it’s one of the most uncertain moments of the trade war so far,” she told AFP. ’