The United States has taken a significant step towards a trade war, as President Donald Trump signed a decree imposing tariffs on imports from Mexico, Canada and China. The swift retaliatory measures from these countries have now led to a full-blown trade conflict.
Canada’s Prime Minister Justin Trudeau announced that the country will impose tariffs of 25% on US goods worth 155 billion Canadian dollars (106 billion US dollars), with additional tariffs on goods worth 30 billion Canadian dollars to take effect on Tuesday and a third set of tariffs on goods worth 125 billion Canadian dollars to be implemented in 21 days.
The Canadian government is also exploring further measures, including those in the areas of critical minerals, energy procurement and other partnerships with the US. Canada will work closely with Mexico, another country affected by the US tariffs.
Trudeau urged Canadians to support local products and consider domestic vacations instead of traveling to the US, saying, “We didn’t want this, but we won’t back down.”
China has announced that it will challenge the US tariffs on Chinese goods at the World Trade Organization (WTO). The Chinese Ministry of Commerce stated that the US tariffs clearly violate WTO rules and warned that a “trade or tariff war” would have no winners.
The Chinese Foreign Ministry also rejected the US President’s justification for the new tariffs, which he claimed would curb the smuggling of the drug fentanyl into the US and the influx of illegal migrants. “Fentanyl is a US problem” the Chinese Foreign Ministry stated.
Mexican President Claudia Sheinbaum has also announced countermeasures in response to the US tariffs, stating that she has instructed her economy minister to impose tariffs on US goods and to take further action to defend Mexico’s interests.
The White House has indicated that US President Trump is likely to respond to the countermeasures from China, Canada and Mexico with further tariffs, which could lead to a trade war with far-reaching economic consequences for all involved countries, including European companies, such as those in the German automotive market.