Donald Trump’s 25% tariffs on goods from Mexico and Canada have gone into effect, along with an additional 10% on Chinese products, totaling a 20% import tax. The US president made the announcement in a speech at the White House, causing a significant drop in US stocks.
These tariffs will have a substantial impact on US companies with factories in Canada and Mexico, particularly car manufacturers. Mr. Trump emphasized the need for companies to build their plants in the United States to avoid tariffs.
Mexico and Canada will face tariffs of 25%, with an additional 10% on Canadian energy, as confirmed by the Trump administration. Furthermore, tariffs on Chinese imports have doubled, now standing at 20%.
Canada swiftly responded by imposing 25% tariffs on US imports worth C$30bn (£16.3bn) and threatened to extend these tariffs to cover more US goods if sanctions against Canada were not lifted. Similarly, China vowed to retaliate against the Trump administration’s actions.
The speech by Mr. Trump sparked fears of a trade war in North America, leading to a sell-off in financial markets. Stock market indexes, such as the Dow Jones Industrial Average and the Nasdaq Composite, fell by 1.4% and 1.76% respectively on Monday. Companies like General Motors, Automaker, and Ford, which have significant production in Mexico, also experienced a decline in share prices.
Consumers in the US may soon see price hikes due to these tariffs, particularly in the automobile sector. Gustavo Flores-Macias, a public policy professor at Cornell University, predicts negative consequences, especially as supply chains across the three countries could be disrupted.
The Trump administration is preparing to implement additional tariffs in the coming weeks. Reciprocal tariffs will be enforced on all countries imposing duties on US products starting on April 2. There is also consideration for imposing 25% tariffs on goods from the EU, with the President claiming that the bloc was designed to harm the United States.
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For more information:
– The effects of Trump trade tariffs explained
– Trump hits out at Zelenskyy again
SOURCE