The threat of Donald Trump's tariff hammer became a reality when the US president signed an executive order over the weekend imposing a 25 percent tariff on goods imported into the US from Canada and Mexico. China is also under fire, and in future Chinese goods will be subject to a ten percent tariff if they are imported into the US. It didn't take long for the three countries to respond.
Canada is imposing a 25 percent tariff on products from the US, while on Sunday it was still unclear what China and Mexico would do specifically, apart from the fact that Mexico would at least impose some tariff on US imports. Trump, however, was not deterred.
- Will it hurt? Yes, maybe (and maybe not), but we will make America great again, and it will be worth it, Trump wrote on Sunday afternoon on the social media site Truth Social, which he owns.
Here he described American consumers' money as subsidies to the many countries that export goods to the United States.
- The United States has large deficits compared to Canada, Mexico and China (and pretty much every other country), owes 36 trillion dollars, and we will no longer be "the stupid country," Trump wrote on Truth Social.
- Make your goods in the United States, and there will be no tariffs.
Expected to have an impact on the stock markets
The tariff conflict between the United States and its neighboring countries as well as China is expected to be felt on the stock markets in the affected countries on Monday, says equity strategist Tine Choi Danielsen from PFA Pension.
- We have been prepared that it would be a long time coming. We have been waiting for the design, and it was a little on the worse side, she tells Ritzau.
The markets had factored in that Trump would impose tariffs on goods from China, Canada and Mexico, but it was not clear until the weekend whether all goods would be covered.
The very fact that there will be broad tariffs is expected to make investors in Canada, China and Mexico pull out their feelers.
Trump also threatens the EU with tariffs
On Friday, Donald Trump warned that new increased tariffs are also on the way against goods from the EU, to which the EU promises to respond.
- The EU will respond in a specific way to any trading partner that unfairly and arbitrarily imposes tariffs on goods from the EU, an unnamed spokesperson for the European Commission told the AFP news agency on Sunday.
The spokesperson said also that the EU "regrets the US decision to impose tariffs on (goods from) Canada, Mexico and China".
- Tariffs create unnecessary economic unrest and increase inflation. It is harmful to everyone, said the EU Commission spokesperson.
China will go to the WTO
According to the news agency Reuters, China has announced that the country will ask the World Trade Organization (WTO) to investigate whether Trump's new tariffs are even legal. And Canada and Mexico will - as mentioned - impose tariffs on American goods.
- The White House's actions tonight are dividing us instead of bringing us together, said Canadian Prime Minister Justin Trudeau at a press conference a few hours after Trump signed the tariff decree.
While other goods from Canada are subject to a 25 percent tariff in the United States, Canadian oil and other energy will escape with a 10 percent tariff.
/ritzau/
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