President Donald Trump took aim at the European Union on Thursday, calling it a “hostile and abusive taxing and tariffing authority” and threatening a 200% tariff on alcohol from EU nations.
Also Thursday, Canada’s finance minister and other officials will meet with U.S. Commerce Secretary Howard Lutnick in an effort to calm an escalating global trade war ignited by tariffs the Trump administration slapped on steel and aluminum imports from around the world.
Trump ratcheted up tariff threats against the United States’ trading partners this week, and Canada and the European Union quickly hit back with their own retaliatory levies.
The back-and-forth has sparked uncertainty among U.S. stocks – and fears of a recession hitting Americans’ wallets. J.P. Morgan’s chief economist said Wednesday that there is a 40% chance of a U.S. recession in 2025.
Americans are also closely watching the Trump administration’s efforts to shrink the federal government, led by Elon Musk’s Department of Government Efficiency. Thursday marks a critical deadline for national agencies, which must submit plans for large-scale layoffs as part of the White House’s effort.
Keep up with live updates from the USA TODAY Network.
The EU said Wednesday that it would impose counter tariffs on almost $30 billion worth of U.S. goods starting next month. The EU announcement said the levies would include “products ranging from boats to bourbon to motorbikes.”
The proposal targets items that “include a mixture of industrial and agricultural products,” the announcement says. Industrial products listed include steel and aluminium items, textiles, leather goods, home appliances, house tools, plastics, wood products. Agricultural products include poultry, beef, certain seafood, nuts, eggs, dairy, sugar and vegetables.
Trump blasted the EU in a post on Truth Social on Thursday: “The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky. If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.”
Chris Swonger, head of the Distilled Spirits Council, said the U.S. and EU have had “zero-for-zero” tariffs since 1997. The U.S. spirits sector supports more than $200 billion in economic activity, including 1.7 million jobs across production, distribution, hospitality and retail and the purchase of 2.8 billion pounds of grains from American farmers, Swonger said in a statement.
“We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create U.S. jobs and increase manufacturing and exports for the American hospitality sector,” Swonger said. “We want toasts not tariffs.”
Thursday is the deadline for federal agencies and departments to give the Office of Personnel Management their plan for large-scale layoffs, called a “reduction in force” or RIF. Agencies may notify employees any day that their jobs will end within 30 or 60 days. The White House has so far declined to talk about when the public will see the plans, but the target numbers of layoffs for each agency and perhaps even location are expected to leak throughout the day and coming weeks as employees are told.
Some of these plans have already come out. About half of Department of Education employees were laid off Wednesday. Earlier in the week USA TODAY learned that the Department of Veterans Affairs was laying off about 16% or 76,000 workers. The National Oceanic and Atmospheric Administration is laying off more than 1,000 people, or about 20% of its staff. Likewise, NASA told employees Monday it would shutter three offices, including the office of the chief scientist.
Overall it is unclear how many of the about 2 million federal employees spread out across the country could lose their jobs. The memo ordering agencies to produce the reduction in force plans called for “a significant reduction.” Agencies can use layoffs, attrition, removal of underperforming employees and renegotiation of collective bargaining agreements.
A majority of Americans believe Trump is being too “erratic” in his moves to shake up the U.S. economy, as his imposition of tariffs against some of the nation’s top trading partners hammers stock markets, a new Reuters/Ipsos poll found. Some 57% of respondents, including one in three Republicans, said the president’s policies have been unsteady as his efforts to tax imports have prompted a global trade war, according to the two-day poll that closed Wednesday.
Americans instead want Trump to continue to focus on combating high prices even as there are growing concerns his policies will drive costs up, not down, the poll found.
Canadian Finance Minister Dominic LeBlanc, Ambassador to the U.S. Kirsten Hillman and Ontario Premier Doug Ford are in Washington to meet with Lutnick, and LeBlanc says the goal for the meeting is to get a sense of the Trump administration’s long-term plans for tariffs.
“The conversation tomorrow will be around lowering the temperature,” LeBlanc said.
He said Canada is ready to review the USMCA − United States-Mexico-Canada Agreement − that outlines trade among the nations. Earlier this week, tensions were heightened when Trump threatened to double the tariffs on Canada. He shelved the idea after Ford agreed to drop a proposed a surcharge on electricity that Ontario sells to three U.S. states.
“We’ve always said the best approach is a coherent conversation that looks at all of these issues, where the three economies are part of the conversation, and where we can arrive at the best agreement for North America,” LeBlanc said.
Trump’s tariffs may be a concern for the economies of Canadian and Mexican, but the levies are pure gold for political leaders in those nations − even as Trump’s own approval ratings have slipped among Americans. Trump’s steep tariffs and his vision of swallowing up Canada as the “51st state” have fueled strong support for leaders in Mexico and Canada.
Mexico President Claudia Sheinbaum’s approval ratings recently reached 85%, the highest approval rating of any Mexican president in the last three decades, according to a poll from El Financiero. In Canada, the ruling Liberal Party hadn’t led in national polls since February 2021. Now, according to a recent Ipsos survey, it leads the oppositon Conservatives, 38% to 36%.
“The Americans – they should make no mistake,” said Mark Carney, who will be sworn in Thursday as Canada’s prime minister. “In trade, as in hockey, Canada will win.”
− Cybele Mayes-Osterman
Trump has long talked about tariffs as a tool to raise revenue and offset costs associated with proposed tax cuts, going so far as to float the idea of replacing income tax with tariffs. Trump’s tariffs on Canada, Mexico and China are expected to cost the typical U.S. household more than $1,200 per year, according to the Peterson Institute for International Economics, a nonpartisan think tank.
The money from tariffs, paid by American companies, goes to the U.S. Department of Treasury and enters the general affairs budget, said Felix Tintelnot, an associate professor of economics at Duke University in North Carolina. From there, it can be used “essentially for anything.”
Trump on Wednesday defended his administration’s decision to lay off about half of the U.S. Department of Education’s staff, citing the department’s own data on the United States’ relatively low academic rankings compared to other countries. Speaking to reporters at the White House, Trump backed Education Secretary Linda McMahon’s efforts while reiterating his goal to move the government’s oversight of the nation’s academic efforts from federal to state leaders.
Trump said he’s concerned that students in China, Norway, Denmark and Sweden are performing better than those who go to schools in the U.S.
“We have a dream. And you know what the dream is? We’re going to move the Department of Education,” Trump said during a bilateral meeting with Ireland Prime Minister Michael Martin. “We’re going to move education into the states, so that the states − instead of bureaucrats working in Washington − can run education.”
– Kayla Jimenez
Trump won’t say whether he thinks his sweeping tariff plan could help push the country into a recession. But, the threat of tariffs and the-already rising costs of everyday items are raising concerns about where the economy is headed. A recession could happen if more people are out of work, large companies see lower profits, the stock market slips and home prices tumble, according to the International Monetary Fund.
Generally, a recession is marked by an extended period of many months or more of economic downturn. And even when a recession is acknowledged by experts and officials, not everyone agrees on when it started or when it ends.
− Damon C. Williams, Zachary Schermele
Tariffs can apply to exports but are are primarily levied on imports, typically to protect industries in the country levying them. Tariffs make imports more expensive, thus making local goods cheaper by comparison. Tariffs also can provide income that can be used to support local industries, fund public programs or cover government expenditures. And they can serve as bargaining tools to win concessions from trading partners.
“While tariffs may seem to penalize foreign producers by making their goods or services less competitive, the reality is that U.S. consumers and businesses ultimately bear the cost,” the Wilson Center scholars Diego Marroquín Bitar and Valeria Moy write in a “Tariffs 101” analysis.
Contributing: Francesca Chambers, USA TODAY; Reuters
