US President Donald Trump has reaffirmed his intention to implement tariffs on Canada, Mexico, and China, prompting a significant sell-off in US stock markets.
In a strong response, Canadian Prime Minister Justin Trudeau condemned the tariffs proposed by Trump, labeling them as “a very dumb thing to do.” He expressed his dismay at the current state of US-Canada relations, stating,
“Today the United States launched a trade war against Canada, their closest partner and ally, their closest friend. At the same, they are talking about working positively with Russia, appeasing Vladimir Putin, a lying, murderous dictator. Make that make sense.”
Escalation of Trade Tensions
Trudeau continued, acknowledging the unusual agreement with the Wall Street Journal, noting that Trump’s decision is ill-advised:
“Now, it’s not in my habit to agree with the Wall Street Journal, but Donald, they point out that even though you’re a smart guy, this is a very dumb thing to do. We two friends fighting is exactly what our opponents around the world want to see.”
This commentary comes in light of Trump’s launch of a trade war against three of America’s largest trading partners, which includes Canada, Mexico, and China. Under the new policies, Canada and Mexico will face a 25% tariff on their goods, while China will incur a 20% tariff on imports.
The announcement has triggered immediate retaliatory actions, sending global stock markets into a downturn amidst rising inflation concerns in the US. Trudeau revealed that Canada plans to impose 25% tariffs on US goods valued at C$155 billion (€102.1 billion), with tariffs on C$30 billion (€19.8 billion) of imports set to take effect on Tuesday, and the remainder to follow in 21 days.
“Our tariffs will remain in place until the US trade action is withdrawn, and should US tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,”
said Trudeau in a statement.
Global Reactions and Future Implications
In a social media post on Truth Social, Trump warned that any retaliatory tariffs from Trudeau would lead to an immediate and equal increase in US tariffs. Meanwhile, Mexican President Claudia Sheinbaum announced her country would respond similarly, revealing plans to disclose targeted products in a public event in Mexico City, signaling a potential effort to de-escalate the trade conflict.
China’s response has also been swift, indicating it would implement additional tariffs of up to 15% on key US agricultural imports, including chicken, pork, soy, and beef, while also restricting business dealings with US companies. The Chinese Ministry of Commerce expressed its dissatisfaction, stating it would “take countermeasures to safeguard its rights and interests.”
As Trump fulfills his campaign promise, he is shifting away from the free trade policies that the US maintained for decades post-World War II. He contends that open trade has resulted in the loss of millions of American factory jobs and asserts that tariffs are the route to national prosperity, dismissing the views of mainstream economists who argue that protectionism is detrimental.
During a recent address at the White House, Trump remarked,
“Import taxes are a very powerful weapon that politicians haven’t used because they were either dishonest, stupid or paid off in some other form. And now we’re using them.”