The White House says it has noticed that Mexico is “serious” about US President Donald Trump’s executive order on tariffs but Canada has “misunderstood” it.
Trump on Saturday ordered sweeping tariffs on goods from Mexico, Canada and China, demanding they staunch the flow of fentanyl and illegal immigrants into the United States, kicking off a trade war that could dent global growth and stoke inflation.
“The good news is that in our conversations over the weekend, one of the things we’ve noticed is that Mexicans are very, very serious about doing what President Trump said,” White House National Economic Council Director Kevin Hassett said on CNBC.
“Canadians appear to have misunderstood the plain language of the executive order,” Hassett added.
“President Trump was absolutely 100 per cent clear that this is not a trade war, this is a drug war.”
When asked what Canada and Mexico must do to lift their tariffs, Trump told reporters on Sunday they “have to balance out their trade, number one”.
“They’ve got to stop people from pouring into our country … they have to stop people pouring in, and we have to stop fentanyl. And that includes China,” Trump said.
European leaders earlier warned that the US threat to expand tariffs to the European Union risked igniting a trade war that would harm consumers on both sides of the Atlantic.
EU foreign policy chief Kaja Kallas said if the US and Europe started a trade war “then the one laughing on the side is China”.
“We are very interlinked. We need America, and America needs us as well,” she said, speaking ahead of an informal gathering of EU leaders in Brussels.
Polish Prime Minister Donald Tusk called for unity, given the challenges both parties faced.
“It is worth doing everything possible to ensure that in the face of a Russian threat or Chinese expansion, we do not fight between allies,” Tusk told reporters in Warsaw.
Trump told the 27 countries of the EU that they were next in line following his decision to impose sweeping tariffs on Mexico, Canada and China.
“It will definitely happen with the European Union. I can tell you that because they’ve really taken advantage of us,” Trump told reporters on Sunday, reiterating complaints about a trade deficit.
“They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them.”
Canadian Prime Minister Justin Trudeau called Antonio Costa, the president of the European Council of EU leaders, on Sunday night to inform him of the Canadian reaction to the tariffs, an EU official said.
Canada has responded with retaliatory levies, and said it will challenge the 25 per cent tariffs legally.
Germany’s conservative opposition leader Friedrich Merz said late on Sunday that tariffs risked backfiring.
“Trump will now also realise that the tariffs he is imposing will not have to be paid by those who import into America. Instead, they will have to be paid for by consumers in America,” said Merz, who is likely to become German leader after an election this month.
French central bank governor Francois Villeroy de Galhau said Trump’s tariffs were “very brutal” and would hit the cars sector especially.
“Everybody loses in this kind of protectionist trade war,” he told France Info radio.
Shares in European car makers fell on Monday on concerns about the effect of tariffs.
In his complaints about the trade balance with the EU, Trump has focused on goods trade alone.
The EU has consistently exported more goods to the United States than it has imported and the US goods trade deficit stood at 155.8 billion euros ($A259.4 billion) in 2023, according to Eurostat data.
However, in services, the US has a surplus of exports over imports with the European Union of 104 billion euros in 2023, according to Eurostat.
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