Trade wars set to erupt after Trump tariffs take effect
WASHINGTON, 7 days ago
US President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, 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 went live at 12:01 am EST (0501 GMT), hours after Trump declared that all three countries had failed to do enough to stem the flow of the deadly fentanyl opioid and its precursor chemicals into the US, a Reuters report said.
On February 1, 2025, President Trump signed executive orders implementing the following tariffs:
* Mexico and Canada: A 25% tariff on most imports, with Canadian energy exports (including crude oil and natural gas) facing a 10% tariff.
* China: An additional 10% tariff on Chinese goods, raising existing tariffs to 20%.
These tariffs, effective March 4, 2025, were justified under the International Emergency Economic Powers Act, with the administration citing inadequate efforts by these countries to curb fentanyl trafficking and illegal immigration.
China responded immediately after the deadline, 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, which have enjoyed a virtually tariff-free trading relationship with the US for three decades, were 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. He said previously that Canada would target American beer, wine, bourbon, home appliances and Florida orange juice.
Mexican President Claudia Sheinbaum was expected to announce her response during a morning news conference in Mexico City on Tuesday, the country's economy ministry said.
The sweeping tariffs may drive up prices for businesses and consumers in the US, damaging the health of the US economy. The economy and inflation was at the top of voter concerns last November – concerns Trump promised to address as he stormed back to the White House, partly on the back of lingering discontent about soaring prices early in the Biden presidency.
