President Donald Trump’s long-standing tariffs on Canada and Mexico were finally enacted on Tuesday, giving the global market a predominant position and setting up costly retaliation by US North American allies.
After midnight, imports from Canada and Mexico are currently taxed at 25%, while Canadian energy products are involved in 10%. Additionally, the 10% tariffs Trump imposed on Chinese imports in February doubled to 20%.
In response, Canadian Prime Minister Justin Trudeau said his country will slap tariffs on more than $100 billion in American goods in 21 days.
China announced on Tuesday that it would charge up to 15% additional fees for imports of major US agricultural products, including chicken, pork, soybeans and beef.
The customs duties announced by the Ministry of Commerce are scheduled to come into effect from March 10th. They are following President Donald Trump’s order to raise tariffs on imports of Chinese goods to 20% across the board. They came into effect Tuesday.
Imports of chicken, wheat, corn and cotton said they would face an additional 15% tariff. Tariffs on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy products will increase by 10%.
Mexico is not responding to customs yet.
The US president’s move has raised fears of higher inflation and a catastrophic trade war, despite his promise to the American people that taxing imports was the easiest path to prosperity for the nation. He expressed his willingness to defy the warnings of mainstream economists, and posted his own public approval on the boundaries, believing that tariffs could be corrected what plagued the country.
“Politicians are very powerful weapons they don’t use because they’re dishonest, stupid or otherwise rewarded,” Trump said Monday at the White House.
Tariffs in Canada and Mexico were originally supposed to start in February, but Trump agreed to a 30-day suspension and negotiated further with two of its biggest US trading partners. The reason for the tariffs stated is to address drug trafficking and illegal immigration, and both countries say they have made progress on these issues. But Trump also said tariffs would fall only if the US trade imbalances close. This is a process that is unlikely to be resolved to a political timeline.
Just as many tariffs could come on the European Union, India, computer chips, cars and medicines, as Trump has promised, tariffs could be short-lived if the US economy is struggling. The US president is injecting confused volatility into the global economy and leaving a balance as he wonders what people will do next.
“It’s confusing, especially compared to the way we saw tariffs roll out in the first (Trump) administration,” said Michael House, co-chair of international trade practices at Perkins COIE Law Firm. In fact, we don’t know what the president will do.”
Democrats quickly criticised tariffs, but even Republican senators raised alarms.
R-Maine Sen. Susan Collins said she is “very worried” about the tariffs that will come into effect due to her proximity to Canada.
The Trump administration has directed a “suspension” on US support for Ukraine last week after a disastrous oval office meeting with Ukrainian President Voldimia Zelenky.
“The economy of Maine and Canada are integrated,” Collins said, explaining that much of the state’s lobster and blueberries will be processed in Canada and then sent back to the US.
The world economy is now caught up in the mist of what looks like a trade war.
Even after Trump announced tariffs were on Monday, Canadian officials were still in touch with their US counterparts.
“The dialogue will continue, but we are ready to respond,” the Canadian Defense Minister attended a special cabinet meeting in Ottawa on US-Canadian relations. “There’s still discussion going on.”
Shortly after Blair spoke, Trudeau said Canada would put a 25% tariff on $155 billion in Canadian ($100 billion) American products, and immediately added $30 billion in Canadian ($21 billion) worth of goods to the remaining amount of US products over the remaining three weeks.
“Our tariffs will be in place until US trade measures are withdrawn, and if US tariffs do not cease, we are actively and continuing discussions with the states and the territories to pursue some non-tariff measures,” Trudeau said.
To resolve the tariffs imposed Tuesday, the White House wants to see a decline in fentanyl attacks in the United States, not just in the northern and southern borders. Management officials say fentanyl attacks last month were linked to foreign cartels everywhere from Louisiana to New Jersey.
Damon Pike, a technical practice leader in customs and trade services at tax and consulting firm BDO, suggested how other countries respond to tariffs with their own import taxes, suggesting that tensions could escalate and increase economic challenges.
“The Canadian list is ready,” Pike said. “The EU list is ready. It will be TIT for TAT.”
The Trump administration suggests that inflation is not as bad as economists claim, and tariffs give foreign companies a reason to open factories in the United States. Trump announced Monday that the Taiwanese semiconductor manufacturer, a computer chip maker, will invest $100 billion in domestic production.
Still, it can take time to move factories across the world and train workers with the skills they need.
Greg Ahearn, president and CEO of Toy Association, said that 20% tariffs on Chinese products are “crippled” because nearly 80% of toys sold in the US are made in China.
“There’s manufacturing, there’s refinement in tools,” he said. “There are many handmade items that are part of these toys that many don’t understand. There are face painting, face masks, hair, hair braids, stuffed toys for cutting and sewing. These are all very high hands and skilled workers who have gone through the generation of supply chains that exist in China.”
For the president who promised a quick outcome, Ahearn added a note on how quickly US factories match their Chinese rivals.
“It can’t be replicated overnight,” he said.
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Gillies was reported from Toronto. Anne D’Nynenzio, authors of Apsacage Press in New York and Lisa Mascaro of Washington, contributed to this report.
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