U.S. President Donald Trump's long-threatened tariffs on Canada and Mexico officially took effect today, rattling global markets and prompting costly retaliatory actions from America's allies in North America. Since after midnight, goods imported from Canada and Mexico will be subject to a 25% tariff, with a 10% tariff on Canadian energy products. In addition, the 10% tariffs Trump imposed on Chinese imports in February will also double to 20%, further escalating trade tensions.
Read Also...:
As warming climate hammers coffee crops, this rare bean may someday be your brew
03-04, 2025
Owner of NYC day care where toddler fatally ingested fentanyl gets 45 years in prison
03-04, 2025
Hundreds of Tesla vehicles recalled due to a software issue which may affect the steering wheel
03-04, 2025
Family of missing Queensland mum Tayla Spies offers $5000 reward for information
03-04, 2025In response, Canadian Prime Minister Justin Trudeau stated that Canada would impose tariffs on over $100 billion (approximately AUD 161 billion) worth of U.S. goods within 21 days. Mexico and China have not yet immediately announced any retaliatory measures. The U.S. President's actions have raised concerns about rising inflation and the prospect of a devastating trade war, despite his promises to the American public that taxing imports is the simplest path to national prosperity.
Trump, disregarding warnings from mainstream economists and risking his own public approval, believes tariffs can solve the nation's woes. "It's a very powerful weapon, but politicians either were dishonest or they were stupid or they were bought off in some form, so they never used it," he said at the White House. "And now we're using them." The tariffs on Canada and Mexico, originally slated to begin in February, were delayed after Trump agreed to a 30-day pause for further negotiations with the two largest U.S. trading partners.
The stated reason for imposing the tariffs is to address drug smuggling and illegal immigration, issues on which both Canada and Mexico say they have made progress. But Trump has also stated that the tariffs will only be removed once the U.S. trade deficit is reduced, a process unlikely to be resolved on a political timetable. The tariffs could potentially be removed in the short term if the U.S. economy suffers, as Trump has pledged, and more tariffs on the EU, India, computer chips, cars, and pharmaceuticals are possible in the future.
The U.S. President has injected an unsettling volatility into the world economy, throwing it off balance, and people are speculating about what he will do next. "It's chaotic, especially compared to how we saw the first (Trump) administration roll out tariffs," said Michael House, co-chair of the international trade practice at law firm Perkins Coie. "It's unpredictable. We don't know what the president's going to do, frankly." Democratic lawmakers were quick to criticize the tariffs, but even some Republican senators issued warnings.
Republican Senator Susan Collins of Maine said she was "very concerned" about the tariffs taking effect because her state borders Canada. "Maine and Canada's economies are integrated," Collins explained, noting that much of the state's lobster and blueberries are processed in Canada before being shipped back to the U.S. The world economy is now entering a fog of trade war. Even after Trump announced yesterday that the tariffs would take effect, Canadian officials remained in contact with their U.S. counterparts.
Canadian Defence Minister Bill Blair said while attending a special cabinet meeting in Ottawa regarding U.S.-Canada relations: "The dialogue will continue, but we are prepared to respond. Discussions are still underway." Shortly after Blair spoke, Trudeau stated that Canada would impose 25% tariffs on $172 billion worth of U.S. goods, beginning immediately with tariffs on $33 billion worth of goods and tariffs on the remaining U.S. products in three weeks. "Our tariffs will remain in place until the U.S. side withdraws its trade actions," Trudeau said. "If the U.S. tariffs don't stop, we are actively engaged in discussions with the provinces and territories to seek several non-tariff measures."
To address the tariffs implemented today, the White House wants to see a decrease in fentanyl seizures within the U.S., not just at the northern and southern borders. Government officials say fentanyl seized last month from places like Louisiana to New Jersey was linked to foreign drug cartels. Damon Pike, who leads the customs and trade services technology practice at tax and advisory firm BDO, said how other countries respond to tariffs with their own import taxes could heighten tensions and potentially increase economic pain. "Canada has their list ready. The EU has their list ready. It's going to be tit-for-tat," Pike said.
The Trump administration says inflation will not be as bad as economists claim and argues that tariffs provide a reason for foreign companies to open factories in the U.S. Yesterday, Trump announced that computer chip manufacturer TSMC would invest $161 billion in domestic production. However, it takes time to relocate factories spread across the globe and train workers in the necessary skills. Toy Association President and CEO Greg Ahearn said that a 20% tariff on Chinese goods would have a "devastating" impact on the toy industry, as nearly 80% of toys sold in the U.S. are made in China.
He said, "The manufacturing and tooling are highly sophisticated. There's a lot of hand-made components to these toys that a lot of people don't understand… face painting, masks, hair insertion, braiding, and the cutting and sewing of plush, requires a very skilled labor force that's been passed down through generations in the supply chain, and those supply chains all exist in China." For a president who has promised quick results, Ahearn added that how long it will take for U.S. factories to catch up to their Chinese competitors requires caution. "It can't be replicated overnight."
