Canada and Mexico have fiercely criticized President Donald Trump’s historic tariffs on goods entering the United States, with both countries vowing retaliation. The tariffs, which also target China, have sparked a wave of global tension and trade fears.
Related article - Us stock markets drop amid escalating trade war concerns.
Trump's Tariffs and Justification
On Tuesday, Trump imposed a 25% tariff on imports from Canada and Mexico, while increasing tariffs on China by 10%.
These tariffs are the highest the U.S. has seen since 1943. Trump justified the tariffs by citing the ongoing flow of illegal drugs, especially fentanyl, into the U.S. from Canada and Mexico, though U.S. Customs and Border Patrol data reveals most fentanyl is seized at the Southern border with Mexico, not the Northern border with Canada.
Canadian Prime Minister Justin Trudeau Responds
Canadian Prime Minister Justin Trudeau condemned the tariffs as a “dumb” policy, calling Trump’s justification for the tariffs “completely bogus.” Trudeau emphasized that the tariffs were based on a false narrative and expressed disappointment in Trump’s warm relations with Russian President Vladimir Putin.
In retaliation, Trudeau announced a 25% tariff on $30 billion worth of U.S. goods, with additional tariffs on $125 billion in U.S. products set to follow in 21 days.
He warned the U.S. that Canadians would stop consuming American products and criticized Trump’s unjust policy.
Mexico’s President Claudia Sheinbaum Responds
Mexican President Claudia Sheinbaum also lashed out against the tariffs, rejecting Trump’s claim that fentanyl was flooding into the U.S. from Mexico.
She pointed to declining fentanyl seizures from Mexico and argued that the tariffs were unjustified. Sheinbaum confirmed that Mexico would impose retaliatory tariffs and outlined the possibility of additional measures, including non-tariff actions.
China’s Retaliation and Stock Market Reactions
China, responding quickly, imposed new tariffs of 10-15% on U.S. agricultural goods, including soybeans, wheat, and chicken, in retaliation for Trump’s tariffs. These duties come on top of tariffs already implemented during the previous U.S.-China trade war.
Stock markets took a significant hit following the tariff announcements. The Dow Jones Industrial Average dropped nearly 800 points, while the S&P 500 and Nasdaq also saw declines.
Retail and automotive stocks were particularly hard-hit, with companies like Best Buy, Target, and Ford all experiencing sharp drops in share prices.
Impact on U.S. Businesses and Consumer Costs
The tariffs are expected to raise costs for U.S. manufacturers and retailers, with Best Buy warning of inevitable price increases. U.S. automakers, heavily reliant on cross-border supply chains with Canada and Mexico, also face increased production costs, leading to declines in their stock prices.
While some groups, like the United Autoworkers (UAW), praised the tariffs as a means to protect U.S. jobs, analysts warn of broader economic repercussions, including higher consumer prices and potential job losses in affected industries.
Global Trade Tensions Escalate
As tensions between the U.S. and its closest neighbors rise, global markets remain on edge, with fears of further escalation in trade disputes.
The outcome of these tariff battles will have lasting effects on international relations and the global economy.
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Written By HowNHowTo.com