Donald Trump to Impose 30% Tariffs on EU and Mexico Starting August 1

Donald Trump has announced a 30 per cent tariff on imports from Mexico and the European Union starting on August 1, the latest escalation in the US president's trade war.

The announcement comes after weeks of negotiation with key trading allies failed to reach a more comprehensive trade deal.

Mr Trump announced the tariffs on two of the United States' biggest trade partners in letters posted to his social media account.

In his letter to Mexico's leader, Mr Trump acknowledged that the country has been helpful in stemming the flow of undocumented migrants and fentanyl into the United States.

But he said the country has not done enough to stop North America from turning into a 'Narco-Trafficking Playground.'

In his letter to the European Union, Mr Trump said that the US trade deficit was a national security threat.

'We have had years to discuss our Trading Relationship with The European Union, and we have concluded we must move away from these long-term, large, and persistent, Trade Deficits, engendered by your Tariff, and Non-Tariff, Policies, and Trade Barriers,' Trump wrote in the letter to the EU.

'Our relationship has been, unfortunately, far from Reciprocal.'

European Commission President Ursula von der Leyen said the EU is prepared to take the necessary steps to safeguard its interests if the US proceeds with its 30 per cent tariff on European goods.

Mr Trump is in the midst of an announcement blitz of new tariffs with allies and foes alike.

With Saturday's letters, Mr Trump has now issued tariff conditions on 24 countries and the 27-member European Union.

The European Union's chief trade negotiator said earlier this week that a trade deal to avert higher tariffs on European goods imported to the US could be reached 'even in the coming days.'

Maroš Šefčovič told EU lawmakers in Strasbourg, France on Wednesday that the EU had been spared the increased tariffs contained in the letters Mr Trump sent on Monday, and that an extension of talks would provide 'additional space to reach a satisfactory conclusion'.

The bloc collectively sells more to the US than any other country.

US goods imports from the EU topped $US553 billion ($840 billion) in 2022, according to the Office of the US Trade Representative.

Mr Trump on April 2 proposed a 20 per cent tariff for EU goods and then threatened to raise that to 50 per cent after negotiations did not move as fast as he would have liked.

The higher tariffs as well as any EU retaliation had been suspended as the two sides negotiate.

However the base rate of 10 per cent for most trade partners as well as higher rates of 25 per cent on autos and 50 cent on steel and aluminium had gone into effect.

Douglas Holtz-Eakin, a former Congressional Budget Office director and president of the centre-right American Action Forum, said the letters were evidence that serious trade talks were not taking place over the past three months.

He stressed that nations were instead talking amongst themselves about how to minimise their own exposure to the US economy and Trump.

'They're spending time talking to each other about what the future is going to look like, and we're left out,' Mr Holtz-Eakin said.

He added that Mr Trump was using the letters to demand attention, but, 'in the end, these are letters to other countries about taxes he's going to levy on his citizens.'