China, Canada to retaliate Trump’s tariff war

Mounting trade wars between the United States and its largest economic partners deepened Tuesday as huge US tariffs on Canada, Mexico and China kicked in, sparking swift retaliation from Beijing and Ottawa. Markets fell in Asia and Europe in response to what analysts said were the steepest tariffs on imports since the 1940s. Trump had […]

Mounting trade wars between the United States and its largest economic partners deepened Tuesday as huge US tariffs on Canada, Mexico and China kicked in, sparking swift retaliation from Beijing and Ottawa.

Markets fell in Asia and Europe in response to what analysts said were the steepest tariffs on imports since the 1940s.

Trump had announced – and then paused – blanket 25 per cent 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 duties will hit over $918 billion in US imports from both countries, and are set to hamper supply chains for key sectors like automobiles and construction materials.

Canada responded with its own retaliatory 25 per cent tariffs, while Mexican President Claudia Sheinbaum said there was no justification for the US move and vowed to hit back with duties of its own.

Trump also inked an order Monday to increase a previously imposed 10 per cent tariff on China to 20 per cent – piling atop existing levies on various Chinese goods.

Beijing condemned the “unilateral imposition of tariffs by the US” and said it would impose 10 and 15 per cent levies on a range of agricultural imports from the United States.

Experts have warned the higher import costs could push up prices for consumers, complicating efforts to bring down inflation.

That includes at grocery stores – Mexico supplied 63 per cent of US vegetable imports and nearly half of US fruit and nut imports in 2023, according to the US Department of Agriculture.

Housing costs could also be hit. More than 70 per cent of imports of two key materials homebuilders need – softwood lumber and gypsum – come from Canada and Mexico, said the National Association of Home Builders.

Ottawa’s retaliatory 25 per cent tariffs on $30 billion of goods went into effect just after midnight Tuesday.

“Canada will not let this unjustified decision go unanswered,” Prime Minister Justin Trudeau said, adding that they would be extended to duties on more than $150 billion of Canadian goods within weeks.

China’s tariffs will come into effect next week and will impact tens of billions of dollars in imports, from US soybeans to chickens.

China also suspended all imports of US lumber and halted soybean shipments from three US exporters.

Beijing’s foreign ministry vowed to fight a US trade war to the “bitter end.”