Trade Wars Erupt: US Imposes Tariffs on Mexico, Canada, and China
Tariffs Take Effect
The United States has imposed new tariffs on imports from Mexico and Canada, and doubled duties on Chinese goods, launching new trade conflicts with the top three US trading partners. The tariff actions, which could upend nearly $2.2 trillion in two-way annual US trade, took effect on Tuesday.
China Responds
China responded immediately, announcing additional tariffs of 10%-15% on certain US imports from March 10 and a series of new export restrictions for designated US entities.
Canada and Mexico Retaliate
Canada and Mexico, which have enjoyed a virtually tariff-free trading relationship with the US for three decades, are poised to immediately retaliate against their longtime ally. Canadian Prime Minister Justin Trudeau said Ottawa would respond with immediate 25% tariffs on C$30 billion ($20.7 billion) worth of US imports, and another C$125 billion ($86.2 billion) if Trump’s tariffs were still in place in 21 days.
Stacking China Tariffs
The extra 10% duty on Chinese goods adds to a 10% tariff imposed by Trump on February 4 to punish Beijing over the US fentanyl overdose crisis. The cumulative 20% duty also comes on top of tariffs of up to 25% imposed by Trump during his first term on some $370 billion worth of US imports.
Recession Fears
The tariffs on Mexican and Canadian products could have much deeper repercussions for a highly integrated North American economy that depends on cross-border shipments to build cars and machinery, refine energy and process agricultural goods. "Today’s reckless decision by the US administration is forcing Canada and the US toward recessions, job losses, and economic disaster," Canadian Chamber of Commerce CEO Candace Laing said.
Piling On
Trump has maintained a blistering pace of tariff actions since taking office in January, including fully restored 25% tariffs on steel and aluminum imports that take effect March 12, rescinding prior exemptions. Trump’s "America First" agenda, aimed at redrawing trade relationships in favor of the US, is expected to be a centerpiece of his Tuesday night address to a joint session of Congress.
Conclusion
The US tariffs on Mexico, Canada, and China have sent shockwaves through global markets, with stocks tumbling and safe-haven bonds rallying. The tariffs have sparked fears of a recession and economic disaster, with Canada and Mexico poised to retaliate against their longtime ally. The impact of these tariffs will be felt far and wide, affecting not just trade but also global economic stability.
FAQs
- What are the new US tariffs on Mexico and Canada?
The US has imposed a 25% tariff on imports from Mexico and Canada. - What are the new US tariffs on China?
The US has doubled duties on Chinese goods to 20%. - How will Canada and Mexico retaliate?
Canada and Mexico are poised to impose retaliatory tariffs on US goods. - What are the potential consequences of these tariffs?
The tariffs could lead to a recession, job losses, and economic disaster. - What is the US "America First" agenda?
The US "America First" agenda aims to redrawing trade relationships in favor of the US.