US heats up trade war with friends & foes |
WASHINGTON:
Donald Trump’s trade war against America’s largest trading partners escalated on Tuesday as huge US tariffs on Canada, Mexico and China kicked in, sparking angry retaliation from all three.
Canadian Prime Minister Justin Trudeau slammed the tariffs as “a very dumb thing to do,” and said Trump was seeking to collapse Canada’s economy to make it easier for the United States to annex his country.
Mexican President Claudia Sheinbaum said she would be laying out her country’s response to the measures on Sunday.
Global markets fell sharply in response to the escalating trade war, with the S&P 500 — a major Wall Street index — extending recent losses to erase all of its gains since Trump’s US election victory in November.
Trump had announced — and then paused — blanket 25 percent tariffs on imports from major trading partners Canada and Mexico in February, accusing them of failing to stop illegal immigration and drug trafficking.
He pushed ahead with them Tuesday, citing a lack of progress on both fronts.
The sweeping duties will hit over $918 billion in US imports from both countries, affecting everything from avocados to the lumber crucial for building US homes, and hampering supply chains for key sectors like automobiles.
Trump also inked an order Monday to increase a previously imposed 10 percent tariff on China to 20 percent — piling atop existing levies on various Chinese goods.
Beijing condemned the “unilateral imposition of tariffs by the US,” filing a complaint with the World Trade Organization and threatening to impose 10 and 15 percent levies on a range of agricultural imports from the United States.
Ottawa’s retaliatory 25 percent tariffs on $30 billion of goods went into effect early Tuesday, and Trudeau said that they would expand to “the remaining $125 billion of American products in 21 days time.”
He accused Trump — who has spoken often of making Canada the 51st American state — of wanting to “see a collapse of the Canadian economy because that would make it easier to annex us.”
“Canadians are reasonable. We are polite. We will not back down from a fight,” he said, adding that Washington had launched a “trade war.”
China said its tariffs against the United States will come into effect next week and will impact tens of billions of dollars in imports, from soybeans to chickens.
Beijing announced that all imports of US lumber have been suspended, and that soybean shipments from three American exporters have been halted, as country’s foreign ministry vowed to fight the US trade war to the “bitter end.”
European Union trade spokesman Olof Gill warned the tariffs on Canada and Mexico threatened transatlantic “economic stability” and risked disrupting global trade, urging Washington to reverse course.
The Tax Foundation estimates that before accounting for foreign retaliation, tariffs on Canada, Mexico and China this time would each cut US economic output by 0.1 percent
