Business
Trump’s Fresh Tariff Threats To EU, China And Halt On Offshore Wind Power Leases Shake European Companies
Trump is back with fresh tariff threats, targeting both the EU and China. On Tuesday, he promised to hit the European Union with tariffs and said the U.S. was mulling a 10% duty on Chinese imports. The reason, Fentanyl shipments from China to the U.S. via Mexico and Canada.
His remarks came a day after taking office without immediately enforcing the tariffs he promised during his campaign, causing a brief sigh of relief from markets and trade groups. However, his latest comments made it clear: Trump still has his eyes set on imposing broader duties. He also set a new deadline—February 1—for 25% tariffs on Canada and Mexico, plus duties on China and the EU.
Trump didn’t hold back, calling out the EU for its trade surplus with the U.S. and repeating his usual rhetoric, “The European Union is very, very bad to us. So they’re going to be in for tariffs. It’s the only way… you’re going to get fairness.”
Earlier, he had threatened tariffs on Canada and Mexico unless they cracked down on illegal migrants and fentanyl trafficking, including chemicals coming from China. As for China, Trump is still pushing for that 10% duty on imports, though he’s now linking it to the February deadline.
In response, China expressed a willingness to maintain communication with the U.S. to resolve differences and foster cooperation, but they warned that trade wars don’t have winners. “We always believe that there is no winner in a trade war,” said Chinese foreign ministry spokesperson Mao Ning.
White House trade adviser Peter Navarro, meanwhile, clarified that the tariff threats on Canada, Mexico, and China were meant to pressure those countries into tackling illegal migration and the flow of fentanyl into the U.S., where 300 Americans die every day from overdoses.
These include digging into the U.S. trade deficit, unfair trade practices, and currency manipulation, particularly by countries like China. Trump’s memo also called for recommendations on solutions, such as a “global supplemental tariff,” and proposed changes to the $800 de minimis duty-free exemption, which is often blamed for enabling the illegal import of fentanyl precursor chemicals.
This move gives Trump some breathing room to sort out the reported differences among his cabinet nominees on how to tackle his bold promises, like imposing universal tariffs and duties on Chinese goods of up to 60%. His more cautious approach to tariffs gave U.S. stocks a boost, with the S&P 500 hitting its highest point in a month, though his recent tough talk on China and the EU might soon stall that momentum.
Trade expert William Reinsch from the Center for Strategic and International Studies suggested that Trump is likely taking his time to build a solid legal foundation for his actions, while figuring out how to leverage the situation to get what he wants.
Meanwhile, Mexico and Canada have adopted a more conciliatory stance regarding Trump’s Feb. 1 deadline.
Mexican President Claudia Sheinbaum emphasized Mexico’s sovereignty, stating they would respond to U.S. actions “step by step.” However, she made it clear that the U.S.-Mexico-Canada free trade agreement, which supports over $1.8 trillion in annual trade, won’t be up for renegotiation until 2026.
Corn farmers are concerned that U.S. tariffs and potential retaliatory duties could disrupt trade with Mexico, their biggest corn export market, and with Canada, the leading customer for U.S. ethanol. “We understand that he is a negotiating type of person,” said Illinois farmer Kenny Hartman Jr., president of the National Corn Growers Association. “We’re just hoping that we can come out of this without losing those exports to Mexico or Canada.”
EU Wind Power Companies Take A Hit
Meanwhile, shares in European wind power companies took a hit on Tuesday after Trump suspended offshore wind leasing on his first day in office, adding more strain to an industry that had been hoping the U.S. would help turn things around. The global offshore wind sector has faced mounting challenges, including rising costs, supply chain issues, and delays, which have led to project cancellations and setbacks.
Trump’s move, announced Monday, halts new federal offshore wind leases pending a review of their environmental and economic impacts. He voiced his opposition to wind power, calling turbines “ugly,” “expensive,” and harmful to wildlife. This shift in policy is a blow to the industry, which had seen some support under former President Joe Biden’s green investment plan.
Denmark’s Orsted saw the biggest drop, plunging 17% after taking a $1.69 billion impairment charge on U.S. projects. The delay and increased costs for Orsted’s Sunrise Wind project, which is set to become the largest U.S. offshore wind farm once completed, were key factors behind the fall. Analysts pointed out that Orsted’s seabed leases, which could now be tied up due to Trump’s actions, are now essentially worthless.
Other wind industry stocks were also down. Portugal’s EDP Renovaveis fell about 1.6%, Germany’s RWE dropped 0.5%, Norway’s Equinor saw a 2.2% dip, and wind turbine maker Vestas was down nearly 3%. Italy’s Prysmian, which had planned to build a plant in the U.S. to supply cables for offshore wind farms, scrapped the plan and saw a slight 1% drop in shares after closing at a record high the previous day.
On the flip side, stocks in nuclear companies surged after Trump’s support for boosting power supplies to meet growing data processing demands. U.S.-based uranium miners like Energy Fuels and enCore Energy saw their shares rise over 4%, while nuclear power companies like Vistra, Talen Energy, and Constellation Energy gained between 4% and 8%.
Trump’s pick for energy secretary, Chris Wright, has made it clear that his top priority will be expanding domestic energy production, particularly nuclear power and liquefied natural gas.
The U.S. currently has around 2.4 gigawatts (GW) of offshore wind projects that are already in the advanced stages, with final investment decisions made and construction underway. These projects are expected to be unaffected by Trump’s new executive order. However, the environmental and economic review of existing offshore wind leases could pose risks for developers with ongoing projects, analysts have warned.
The American Clean Power Association (ACP), a key player in the U.S. clean energy sector, has strongly opposed Trump’s order on wind leasing and permitting. The ACP pointed out that many states that voted for Trump are among the top 10 in the U.S. in terms of reliance on wind power, with some depending heavily on wind for a large portion of their electricity needs. They argue that restricting wind development in these states could lead to higher energy bills for consumers.
The political influence of the oil and gas industry on Trump is also evident. In 2024, the industry donated a hefty $32.3 million to Trump and related groups, according to OpenSecrets. In contrast, the renewable energy sector raised only $453,687 for Trump, with a significant chunk—78.7%—of the $2.9 million in political donations from the renewable sector going to Democrat candidates.