WASHINGTON: President Donald Trump on Saturday signed an order to impose stiff tariffs on imports from Mexico, Canada and China, drawing swift retaliation and an undeniable sense of betrayal from the country’s North American neighbours as a trade war erupted among the longtime allies.
A Big Gamble In 2nd Term
The US president posted on social media that the tariffs were necessary “to protect Americans”, pressing the three nations to do more to curb the manufacture and export of illicit fentanyl and for Canada and Mexico to reduce illegal immigration into the US. The tariffs, if sustained, could cause inflation to significantly worsen, threatening the trust that many voters placed in Trump to lower the prices of groceries, gasoline, housing, autos and other goods as he promised. They also risked throwing global economy and Trump’s political mandate into turmoil just two weeks into second term.
Retaliation Clause To Up Rates
Trump declared an economic emergency in order to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada. Energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10% rate. Trump’s order includes a mechanism to escalate rates charged by the US against retaliation by the other nations.
Emergency Law Invoked
The executive orders were issued under a decades-old law called the International Emergency Economic Powers Act, and they expand the scope of a national emergency that Trump declared with respect to “influx of illegal aliens and illicit drugs” on first day in office.
Canada Feels ‘Betrayal’
“The actions taken today by the White House split us apart instead of bringing us together,” Canadian PM Justin Trudeau said as he announced that his country would put matching 25% tariffs on up to $155 billion in US imports, including alcohol and orange juice. He channelled the “betrayal” that many Canadians are feeling, reminding Americans that Canadian troops fought alongside them in Afghanistan and helped respond to myriad crises. He encouraged Canadians to buy Canadian products and vacation at home rather than in US.
Mexico Accuses WH Of Slander
In her post, Mexico President Claudia Sheinbaum rejected as “slander” the White House’s allegation that drug cartels have an alliance with the Mexican govt, a point Trump’s administration used to justify the tariffs. She instructed her economy secretary to implement a response that includes retaliatory tariffs and other steps.
China: Fentanyl A US Problem
China’s ministry of foreign Affairs said the country’s govt “firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests.” “Fentanyl is America’s problem,” it said. “The Chinese side has carried out extensive anti-narcotics cooperation with the US and achieved remarkable results.” The ministry of commerce said it would file a lawsuit with the WTO.
Tariffs Go Into Effect Tuesday
The tariffs will go into effect Tuesday. An analysis by the Budget Lab at Yale shows, if the tariffs were to continue, an average US household would lose roughly $1,245 in income this year, in what would be the overall equivalent of a more than $1.4 trillion tax increase over the next 10 years.
Is European Union Next?
The president is preparing more import taxes. On Friday, he mentioned imported computer chips, steel, oil and natural gas, as well as copper, pharmaceutical drugs and imports from the EU – moves that could essentially pit the US against much of the world as Brussels said it will hit back. AP & NYT
