President Trump's executive order imposing tariffs on Canada, Mexico, and China sparks immediate retaliatory measures and economic concerns. The tariffs aim to curb illegal immigration and drug trafficking, but experts warn of potential negative impacts on all involved economies.
President Trump signed an executive order on Saturday imposing 25% tariffs on imports from Canada and Mexico, while adding an additional 10% levy on goods from China. Canada responded within hours with retaliatory tariffs of its own, while Mexico announced plans to implement tariffs on U.S. imports as well. China's commerce secretary stated that China would challenge the tariffs through the World Trade Organization, alleging that the move 'seriously violates' WTO rules.
This action, which President Trump had threatened even before his return to power earlier this month, highlights his willingness to utilize trade policy even against some of the U.S.'s largest economic allies. The tariffs take effect at 12:01 a.m. Tuesday. While the order imposes 25% tariffs on goods from Canada, 'energy resources' such as oil and gas will face a 10% tariff. The order stipulates that if any of the three nations 'retaliate against the United States' with 'import duties' or 'similar measures,' the president 'may increase or expand in scope the duties imposed under this order to ensure the efficacy of this action.'According to the White House, the tariffs are intended to curb the flow of undocumented immigrants and illicit drugs into the U.S.; stimulate a resurgence in domestic manufacturing; and generate federal revenue. In a statement posted on social media after the announcement, Mr. Trump stated that the order was issued through the International Emergency Economic Powers Act 'because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl.' Trudeau announced in a news conference Saturday night that Canada would retaliate by imposing 25% tariffs 'against $155 billion worth of American goods,' with the initial set of tariffs taking effect Tuesday. 'This will include immediate tariffs on $30 billion worth of goods as of Tuesday, followed by further tariffs on $125 billion worth of American products in 21 days' time to allow Canadian companies and supply chains to seek to find alternatives,' Trudeau said. And in a statement posted on social media, Mexican President Claudia Sheinbaum declared she instructed her economic secretary to develop a response encompassing both retaliatory tariffs and other measures 'in defense of Mexico's interests.' 'We categorically reject the defamatory claims made by the White House accusing the Government of Mexico of having alliances with criminal organizations, as well as any attempts to interfere in our territory,' Sheinbaum wrote. John Murphy, senior vice president for the U.S. Chamber of Commerce, which claims to be the world's largest business organization, criticized Mr. Trump's decision, stating in a release that 'the imposition of tariffs under IEEPA is unprecedented, won't solve these problems, and will only raise prices for American families and upend supply chains.'Murphy added that the Chamber 'will consult with our members, including main street businesses across the country impacted by this move, to determine next steps to prevent economic harm to Americans.' Three trade associations for the distilled spirits industry — Distilled Spirits Council of the U.S., the Chamber of the Tequila Industry, and Spirits Canada — released a joint statement expressing 'deep concern that U.S. tariffs on imported spirits from Canada and Mexico will significantly harm all three countries and lead to a cycle of retaliatory tariffs that negatively impacts our shared industry.'Bob Hemesath, an Iowa farmer and board chairman of Farmers for Free Trade, an agriculture group advocating for more open trade, stated in a release that Canada, Mexico, and China are 'indispensable markets for the livelihood of the American ag economy,' and 'placing tariffs on the three largest export markets for American farmers and ranchers, particularly for an extended period of time, would have severe consequences.' House Speaker Mike Johnson praised the order, writing on social media that Mr. Trump is 'holding Mexico, Canada, and China accountable for their role in the flow of illegal aliens and illicit drugs across our borders. These countries are now on notice to work quickly to stop the madness. This is long overdue.' Senate Minority Leader Chuck Schumer criticized the move in a series of social media posts, one of which read: 'You're worried about grocery prices. Don's raising prices with his tariffs.' Experts warn that the impact of the tariffs could affect the economies of Canada, Mexico, and China — the nation's three biggest trading partners — as well as the U.S. itself. Canada's economy could shrink by 3.6%, while Mexico could experience a 2% decline, according to Cornell University economics professor Wendong Zhang. Simultaneously, inflation in the U.S. could rise by as much as 1 percentage point, pushing it as high as 4% on an annual basis, or double the Federal Reserve's goal for a 2% annual rate, Capital Economics stated in a Jan. 28 research note
TARIFFS TRADE WAR CANADA MEXICO CHINA DONALD TRUMP INTERNATIONAL RELATIONS ECONOMICS
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