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What everyone expected Canada and China retaliate after Trump’s tariffs to signal what’s coming for the consumers in the US. Thus escalating trade tensions and rattling global markets.
President Trump’s new tariffs include a 25% levy on most imports from Canada and Mexico, with an additional 10% tariff on Canadian energy exports. Tariffs on Chinese goods were increased from 10% to 20%.
Canada and China retaliate after Trump’s tariffs
Beijing responded by slapping additional tariffs of 10-15% on a variety of U.S. agricultural imports, including chicken, pork, soy and beef, starting next week, China’s finance ministry announced.
Canadian Prime Minister Justin Trudeau, meanwhile, said Ottawa would impose immediate 25% tariffs on more than $20 billion worth of U.S. imports. Tariffs on an additional $86 billion worth of products will take effect in 21 days.
“Our tariffs will remain in place until the U.S. trade action is withdrawn,” Trudeau said, adding his government was looking into non-tariff measures if the U.S. did not reverse course.
Trump defended the tariffs, arguing they would punish Canada and Mexico — the two largest trade partners to the U.S.— for fentanyl trafficking.
He also said the move would encourage car manufacturers and other businesses to move their production to the United States.
Asian Markets Took a hit after Tariffs
Asian markets tumbled shortly after the tariffs took effect. Japan’s Nikkei index dropped by more than 2%, while Hong Kong’s Hang Seng was down by 1.5%.
On Wall Street, U.S. stocks closed sharply lower Monday ahead of the tariff deadline. The S&P 500 fell 1.8%, the Nasdaq dropped 2.6% and the Dow decreased by 1.5%.
The market slides follow weeks of speculation over whether Trump would follow through with the tariffs. Trump had originally said the tariffs would begin on Feb. 1, but then gave leaders of the two countries a month to show they were curbing illegal immigration into the United States as well as drug trafficking.
Last week, he briefly said he would put off the tariffs until April 2 — then a day later, said that March 4 was the deadline.
During the weekend, Commerce Secretary Howard Lutnick said that the decision on the tariff rate was still up in the air, telling Fox News that the two nations had “done a reasonable job” curbing migration but not fentanyl.
“He’s sort of thinking about right now how exactly he wants to play it with Mexico and Canada, and that is a fluid situation,” Lutnick
