Investing.com - President Donald Trump has threatened to slap increased levies on Canada and the European Union if the two do "economic harm" to the U.S.
In a post on Truth Social on Thursday, Trump said he would impose "large scale tariffs, far larger than currently planned" in order to "protect the best friend that each of those two countries has ever had."
The statement comes after Trump announced 25% tariffs on automotive imports into the U.S. on Wednesday, following through on an earlier pledge to penalize foreign manufacturers of cars and trucks. The levies are due to take effect from April 3.
A separate plan to institute levies matching tariffs charged by foreign countries was also set to come into effect that day, but Trump said on Wednesday that duties would likely be lower than initially anticipated.
Trump has argued that his tariffs are necessary to offset lost revenues from proposed tax breaks and help bring industrial jobs back to the U.S.
Canadian Prime Minster Mark Carney said the auto tariffs represented a direct attack on its workers, adding that officials in Ottawa would decide what actions they could take in response, including possible retaliatory countermeasures.
Carney, who faces a looming election next month, noted that the White House’s pronouncement violates a prior trade agreement signed between the U.S., Canada and Mexico during Trump’s first term in office.
At the same time, European Commission President Ursula von der Leyen said the EU regrets the U.S. auto tariffs, which stand to hit the region’s car industry hard. Europe’s top automaker, Volkswagen (ETR:VOWG_p), is particularly exposed, with 43% of its U.S. sales sourced from Mexico, according S&P Global Mobility. Peers Mercedes Benz (ETR:MBGn), BMW (ETR:BMWG), and Porsche are also under heavy pressure.
In a statement, von der Leyen called the tariffs "taxes" that are "bad for businesses" and "worse for consumers equally in the U.S. and European Union."
"The EU will continue to seek negotiated solutions, while safeguarding its economic interests," von der Leyen said.