US President Donald Trump follows through on threats, imposing tariffs on key trading partners Canada and Mexico, and escalating existing tariffs on China. This move triggers fears of economic disruption and price increases.
US President Donald Trump dashed hopes on Monday of a last-minute deal with Canada and Mexico to avoid sweeping tariffs, while simultaneously signing an order to increase duties on China . Trump had initially announced and then paused blanket tariffs on imports from major trading partners Canada and Mexico in February, citing their failure to curb illegal immigration and drug trafficking.
The pause was set to expire on Tuesday, and US stock markets plummeted after Trump informed reporters that there was “no room left” for both countries to avert new levies. The White House also confirmed that Trump had issued an order to raise a previously imposed 10 percent tariff on China to 20 percent. However, the impending tariffs, particularly on Canada and Mexico, threaten to disrupt supply chains for crucial sectors like automobiles and construction materials, potentially leading to a rise in consumer prices. This development could complicate Trump’s efforts to fulfill his campaign promises of lowering costs for households. \On Monday, Trump stated to reporters that tariffs of up to 25 percent on Canada and Mexico were “all set.” He added, “What they’ll have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.” In Ottawa, Canadian Foreign Minister Melanie Joly characterized Trump’s looming tariffs as an “existential threat” to the country, with thousands of jobs at stake. Beyond this week’s impending deadline, Trump announced on social media that tariffs on agricultural imports would take effect on April 2nd. A White House official explained to AFP that this measure falls under Trump’s existing plans for reciprocal tariffs tailored to each trading partner. \Ryan Majerus, a former US trade official, stated, “There’s no doubt that the administration is trying to solve the long-standing fentanyl and immigration challenges, and these tariffs have given the administration leverage.” However, he cautioned, “It remains to be seen how this will all play out in potential lawsuits” as using emergency economic powers to impose tariffs on Canada, Mexico, and China is unprecedented. Robert Dietz, chief economist at the National Association of Home Builders, told AFP that his group anticipates “a combined duty tariff rate of above 50 percent on Canadian lumber.” He added, “Softwood lumber futures prices have gone up eight percent in the last few weeks.” While the United States also plans to expand forestry, Dietz indicated that prices will likely increase in the short term. Anecdotally, some builders anticipate facing higher costs of $7,500 to $10,000 per newly built single-family home. JPMorgan analysts warned on Friday that Tuesday’s tariffs would “create a significant new headwind to economic activity” and drive up consumer costs. Mexico’s President Claudia Sheinbaum stated on Monday that her country has contingency plans, regardless of the decision Trump makes. \While Washington has targeted China over chemicals used in the fentanyl drug, many of these components have legitimate medical applications as well, making prosecution complex. Canadian Prime Minister Justin Trudeau has asserted that less than one percent of the fentanyl and undocumented migrants entering the United States come through the Canadian border. However, he emphasized on Sunday that Canada would “have a strong, unequivocal and proportional response” if tariffs were imposed. Trudeau’s government has implemented a series of measures to address Trump’s concerns, including a Can$1.3-billion ($901-million) plan to enhance border security. Meanwhile, Mexico extradited some of its most notorious imprisoned drug lords to the United States last week in an effort to avert the sweeping duties
Tariffs Trump Canada Mexico China Economy Trade US Politics Immigration Fentanyl
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