Trade wars: Trump hits Canada, Mexico, China with steep tariffs

WASHINGTON: US President Donald Trump’s new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, launching new trade conflicts with the top three US trading partners.

The tariff actions, which could upend nearly $2.2 trillion in two-way annual US trade went into effect hours after Trump declared that all three countries had failed to do enough to stem the flow of the deadly fentanyl opioid and its precursor chemicals into the US.

China responded immediately after the deadline, announcing additional tariffs of 10%-15% on certain US imports from March 10 and a series of new export restrictions for designated US entities.

Canada and Mexico, which have enjoyed a virtually tariff-free trading relationship with the US for three decades, were poised to immediately retaliate against their longtime ally.

Canadian Prime Minister Justin Trudeau said Ottawa would respond with immediate 25% tariffs on C$30 billion ($20.7 billion) worth of US imports, and another C$125 billion ($86.2 billion) if Trump’s tariffs were still in place in 21 days. He said previously that Canada would target American beer, wine, bourbon, home appliances and Florida orange juice.

“Tariffs will disrupt an incredibly successful trading relationship,”  Trudeau said, adding that they would violate the US-Mexico-Canada free trade agreement signed by Trump during his first term.

Ontario Premier Doug Ford said he was ready to cut off shipments of nickel and transmission of electricity from his province to the US in retaliation.

The extra 10% duty on Chinese goods adds to a 10% tariff imposed by Trump on February 4 to punish Beijing over the US fentanyl overdose crisis. The cumulative 20% duty also comes on top of tariffs of up to 25% imposed by Trump during his first term on some $370 billion worth of US imports.

Some of these products saw US tariffs increase sharply under former president Joe Biden last year, including a doubling of duties on Chinese semiconductors to 50% and a quadrupling of tariffs on Chinese electric vehicles to over 100%.

The 20% tariff will apply to several major US consumer electronics imports from China previously untouched by prior duties, including smartphones, laptops, videogame consoles, smartwatches and speakers and Bluetooth devices.

China’s new tariffs announced on Tuesday targeted a wide range of US agricultural products including certain meats, grains, cotton, fruit, vegetables and dairy products.

Beijing also placed 25 US firms under export and investment restrictions on national security grounds. Ten of these firms were targeted for selling arms to Taiwan.

China’s commerce ministry said the US tariffs violated World Trade Organization rules and “undermine the basis for economic and trade cooperation between China and the U.S.”

Trump has maintained a blistering pace of tariff actions since taking office in January, including fully restored 25% tariffs on steel and aluminum imports that take effect March 12, rescinding prior exemptions.

Trump recently opened a national security investigation into imports of lumber and wood products that could result in steep tariffs. Canada, already facing 14.5% US tariffs on softwood lumber, would be hit particularly hard.

A week earlier, Trump revived a probe into countries that levy digital services taxes, proposed fees of up to $1.5 million on every Chinese-built ship entering a US port and launched a tariff investigation into copper imports.

These add to his plans for higher “reciprocal tariffs” to match the levies of other countries and offset their other trade barriers, a move that could hit the European Union hard.