US president Donald Trump has officially imposed new tariffs on imports from Mexico and Canada, escalating tensions with two of America’s biggest trading partners. The new policy introduces a 25 per cent levy on goods from Mexico and Canada, while also doubling tariffs on Chinese imports to 20 per cent.
The move, which affects nearly $2.2 trillion in annual trade, has triggered sharp responses from affected nations, sparking fears of a trade war.
Canadian prime minister Justin Trudeau announced retaliatory tariffs on $20.7 billion (C$30 billion) worth of U.S. imports. Additionally, Trudeau warned that if the U.S. tariffs remain in place after 21 days, Canada will extend the measures to another $86 billion (C$125 billion) worth of American goods. The targeted products include American beer, wine, bourbon, home appliances, and Florida orange juice.
Mexican President Claudia Sheinbaum confirmed that Mexico will respond with its own tariffs on U.S. goods. She announced that details of the targeted products would be revealed in a public event in Mexico City’s central plaza on Sunday (3). The move is expected to intensify the trade conflict between the neighboring countries.
British Finance Minister Rachel Reeves warned that while the UK is not directly targeted by the tariffs, it could still suffer economic consequences due to the slowdown in global trade. Additionally, major European corporations are preparing contingency plans as fears mount that Trump may introduce similar tariffs against the European Union.
The financial markets responded negatively to Trump’s announcement. On Tuesday morning, the S&P 500 fell by 0.7 per cent, the Nasdaq dropped 0.6 per cent, and the Dow Jones Industrial Average plummeted by 423 points, reflecting investor uncertainty over the trade war’s economic fallout. Analysts predict further volatility in global markets as nations continue to retaliate.
The tariffs imposed by the Trump administration have been justified as part of an effort to protect American jobs and industries. However, experts warn that these measures could backfire, leading to higher prices for consumers and supply chain disruptions.
The ongoing trade tensions between the US and its key allies may also strain diplomatic relations and create long-term economic uncertainty.
As the global response to these tariffs unfolds, the coming weeks will be critical in determining whether the situation escalates into a full-blown trade war or if diplomatic negotiations can prevent further economic fallout.
