Trump escalates trade tensions with new tariffs on Mexico and EU

President Donald Trump is reigniting trade battles with two major U.S. allies

(NBC)- President Donald Trump is reigniting trade battles with two major U.S. allies, announcing over the weekend that new 30 percent tariffs will be imposed on imports from Mexico and the European Union starting August 1st. The move adds fresh strain to already tense economic relationships, though the president says he’s still open to striking deals.

“We’re dealing with other countries that would rather have a deal than a regular tariff,” Trump said. “We’re willing if they’re willing to open up.”

European leaders have pushed back forcefully, criticizing the tariffs as economically damaging to businesses and consumers on both sides of the Atlantic. Officials pledged to ramp up negotiations, but also warned of possible retaliatory measures if no resolution is reached. Mexico, too, condemned the new tariffs, calling them “unfair treatment” in the wake of Trump’s accusations that the country has failed to stop drug cartels from operating across the border. Despite months of tariff threats, inflation has shown signs of cooling. The Trump administration insists prices for everyday goods won’t spike as a result of the new trade measures.

“These tariffs are real if the president doesn’t get a deal that he thinks is good enough,” said Kevin Hassett, Director of the National Economic Council. “But conversations are ongoing, and we’ll see where the dust settles.”

Still, some experts caution that if all the proposed import taxes take effect, the cumulative impact could be felt widely.

“Everything is going to cost more over time,” said CNBC Global Supply Chain Reporter Lori Ann LaRocco.

Meanwhile, back in Washington, Homeland Security Secretary Kristi Noem is defending her agency’s response to deadly flooding in Texas. Critics have pointed to a department policy requiring her personal sign-off on contracts over $100,000, alleging it led to delays in emergency aid.

“That’s just false,” Noem said flatly in response. On the future of FEMA, Noem hinted at major reforms: “The president recognizes that FEMA should not exist the way that it always has been. It needs to be redeployed in a new way.” She highlighted the role of other agencies like the Coast Guard in the federal flood response.