Photo: Mike Blake/ Reuters
On Tuesday morning, new duties imposed by US President Donald Trump officially came into force, triggering a trade confrontation with three key economic partners – Canada, Mexico and China. These include a 25% tax on goods from Canada and Mexico and a 20% duty on products from China. This was reported by Reuters.
Experts estimate that these measures could affect a $2.2 trillion annual trade turnover. Trump justified his decision by fighting the flow of illicit fentanyl, which, according to him, comes to the US from China and Latin America.
Canada and Mexico prepare to strike back
Canada and Mexico, which have enjoyed duty-free trade with the US for three decades, immediately announced countermeasures. Canadian Prime Minister Justin Trudeau announced a mirror 25% tariff on C$30 billion (USD 20.7 billion) worth of US goods. Additional restrictions could affect imports worth CAD 125 billion (USD 86.2 billion) if the US does not lift the tariffs within three weeks.
Canada, in particular, plans to impose duties on American beer, wine, bourbon, electronics and juices. Ontario Premier Doug Ford has even suggested the possibility of suspending the supply of nickel and electricity to the US.
Mexican President Claudia Sheinbaum is also set to announce the measures at a special press conference.
China strikes back
China immediately responded to the 20% duties by announcing additional taxes of 10-15% on US products starting on 10 March. At the same time, Beijing expanded the list of export restrictions for 15 US companies and added 10 firms to the list of “dangerous organisations”.
China’s restrictions will affect a wide range of US goods, including meat, grains, cotton, fruits, vegetables and dairy products. Analysts point out that American farmers are particularly vulnerable, having already suffered from Trump’s trade wars in his first term as president, losing more than $27 billion in exports.
What’s next?
Experts warn that trade tensions between the US, Canada, Mexico and China could cause economic turmoil on a global scale. At the same time, the White House continues to insist on a tough policy on international trade, justifying it with national interests.
