On Tuesday, new 25-percent US tariffs on imports from Mexico and Canada came into effect, as well as doubling duties on Chinese goods to 20%, initiating new trade conflicts with the three largest US trading partners.
The tariff measures, which could undermine nearly $2.2 trillion in bilateral annual US trade, came into effect just hours after Trump stated that all three countries had not done enough to stop the flow of the deadly opioid fentanyl into the US, writes Reuters.
Additional 10-percent duties on Chinese goods are added to the 10-percent tariffs imposed by Trump on February 4 to punish Beijing in connection with the US fentanyl overdose crisis. The combined 20-percent duties also supplement the tariffs of up to 25% imposed by Trump during his first term on US imports worth about $370 billion.
The 20% tariffs for China will apply to a range of major consumer electronics imported by the US from China, which were not affected by previous duties, including smartphones, laptops, gaming consoles, smartwatches, and speakers, as well as Bluetooth devices.
China responded promptly, announcing the introduction of additional tariffs of 10-15% on certain types of American imports starting March 10 and a series of new export restrictions for certain American companies.
The new Chinese tariffs affected American agricultural products, including certain types of meat, grain, cotton, fruits, vegetables, and dairy products. The country's Ministry of Finance announced the introduction of 15-percent tariffs on imports of chicken, wheat, corn, and cotton from the US, as well as 10-percent tariffs on imports of soybeans, pork, beef, fruits, vegetables, and dairy products.
Beijing also imposed export and investment restrictions on 25 American companies for national security reasons. Ten of these firms were targeted for selling weapons to Taiwan.
The Chinese Ministry of Commerce stated that American tariffs violate World Trade Organization rules and «undermine the foundation of economic and trade cooperation between China and the US».
Canadian Prime Minister Justin Trudeau stated that Ottawa will respond with immediate 25-percent tariffs on US imports worth 30 billion Canadian dollars ($20.7 billion) and another 125 billion Canadian dollars ($86.2 billion) if Trump's tariffs remain in effect after 21 days. He previously stated that Canada would impose tariffs on American beer, wine, bourbon, household appliances, and orange juice from Florida. «The tariffs will disrupt incredibly successful trade relations», — Trudeau said, adding that they will violate the free trade agreement between the US, Mexico, and Canada, signed by Trump during his first term.
«Today's reckless decision by the US administration leads Canada and the US to a recession, job losses, and economic catastrophe», — quotes Reuters the statement of Candice Laing, CEO of the Canadian Chamber of Commerce. According to her, American tariffs will not lead to the «golden age» that Trump dreams of, but on the contrary, will lead to higher prices for consumers and producers and disrupt supply chains. «Tariffs — are a tax on the American people», — Laing stated.
Mexican President Claudia Sheinbaum will announce her retaliatory measures on Tuesday, the country's Ministry of Economy reported.
The Trump administration's decision affected financial markets: global stocks fell, and safe bonds began to rise. The Canadian dollar and Mexican peso fell against the US dollar.
Trade wars were characteristic of Mr. Trump's first term in the White House. But his latest tariffs against Canada, Mexico, and China could expand the scale of the consequences. These three countries account for more than a third of the products imported into the United States, providing tens of millions of American jobs. The new tariffs are likely to lead to higher prices for a wide range of goods, including cars, mobile phones, computers, tequila, avocados, and gasoline.
Photo: The New York Times