The trade war has officially begun! Tariffs take effect, stock market crashes, Trudeau urgently delivers speech
Trump's executive order came into effect at 12:01 AM Eastern Time, imposing a comprehensive 25% tariff on Canada and Mexico, while imposing a lower 10% tariff on Canadian energy.
The tariffs, which will impose 25% on Canada and Mexico respectively, will soon take effect, "Trump said at the White House on Monday, sparking an immediate reaction from Wall Street. They must accept tariffs
Canadian Prime Minister Trudeau issued a statement on Monday evening stating that Trump's tariffs are "unreasonable" and that Canada will take countermeasures, including retaliatory tariffs and other measures.
Canada's response is to immediately impose tariffs on $30 billion worth of US goods and impose tariffs on the remaining $125 billion worth of US products 21 days later.
Trudeau said, "Our tariffs will continue until the United States withdraws its trade actions. If the US tariffs do not end, we will actively negotiate with provinces and territories to take a series of non-tariff measures. We urge the US to reconsider its tariff decisions, but Canada firmly defends our economy, employment, workers, and fair trade
Image source: Global News
Trudeau will hold a press conference in Ottawa on Tuesday morning, attended by Finance Minister Dominic LeBlanc, Foreign Minister M é lanie Joly, and Public Safety Minister David McGuinty.
On Monday afternoon, the US stock market was hit, with the S&P 500 index falling 2%, the Dow Jones Industrial Average falling 1.5%, and the Nasdaq Composite index falling 2.6%.
Ontario Governor Ford has warned the United States that Canada will respond strongly and hinted at the possibility of cutting off critical mineral and energy supplies to the United States. He said that Trump needs to withdraw this decision, otherwise it will cause huge damage to both the US and Canada.
The market will go downhill faster than the American bobsleigh team, "Ford told NBC News on Monday." This will be a complete disaster
Ford said that Trump left Canada with no other choice. He said, "When someone attacks our country without reason, we must respond
After Trump initially signed the executive order, Canadian officials and provincial leaders made a month long diplomatic effort in Washington to try to defuse the tariff threat. However, this tariff policy is linked to the Trump administration's claim of illegal immigration and drug trafficking at the northern border.
Although Trump's team has expressed support for Canada's border security plan, it is unclear whether there are any factors that could change the president's decision to impose tariffs.
According to data from the US Customs and Border Protection, the number of people and the amount of drugs illegally entering the United States from Canada is negligible compared to the southern border. In January of this year, northern border patrol personnel only seized 13.6 grams of fentanyl.
Trump has previously stated that delaying the implementation of tariffs is to buy time to reach an "economic agreement," and hinted on Monday that Canada and Mexico should "build their car factories and other manufacturing industries in the United States" so that tariffs are not needed.
Dan Kelly, President of the Canadian Federation of Independent Business (CFIB), said, "Tariffs are being used as a sword hanging over our heads." The threat of tariffs has severely undermined investor confidence.
Trade unions and industry organizations in Canada and the United States have condemned this tariff policy. The International Association of Machinists and Aerospace Workers (IAMAW), representing approximately 600000 workers in Canada and the United States, urged Trump to "immediately reconsider these tariffs and develop trade policies that strengthen rather than weaken the economic relationship between the two countries.
Many Canadian officials believe that Trump's constant threats to impose tariffs are related to the upcoming mandatory review of the Canada U.S. - Mexico Agreement. This trade agreement was negotiated during the first Trump administration to replace the North American Free Trade Agreement (NAFTA).
Mike Holden, Chief Economist of the Alberta Business Council, said that Trump doesn't care about whether policies are popular, but if the US economy is hit hard, it may make him change his mind.
Holden said, "If we see a sharp decline in the stock market, a significant increase in inflation in the United States, an economic slowdown, or even large-scale layoffs, I think these are the things Trump will pay attention to
In addition to imposing tariffs on Canada and Mexico, Trump has doubled the 10% tariff imposed on Chinese imports in February to 20%.
China immediately announced that it would impose tariffs of up to 15% on key agricultural products from the United States, including chicken, pork, soybeans, and beef.
A report released last month by the Peterson Institute for International Economics (PIIE) stated that Trump's tariff policies on Canada, Mexico, and China will result in an additional annual expenditure of over $1200 for the average American household.
Democratic lawmakers in the United States quickly criticized this decision, and even some Republican senators issued warnings.
Maine Republican Senator Susan Collins said she is "very concerned" about the implementation of tariffs because Maine's economy is closely linked to Canada.
The economies of Maine and Canada are integrated, "Collins explained, stating that most of the state's lobsters and blueberries are processed in Canada and then returned to the United States for sale.
After returning to the White House in January this year, Trump began implementing tariff policies aimed at disrupting global trade. He ordered a 25% tariff on all steel and aluminum imports to the United States on March 12th, and the White House has confirmed that these tariffs will be implemented in conjunction with new tariffs on Canada.
Trump also signed an executive order to implement "equivalent tariffs" starting from April 2nd, proposing to impose tariffs on cars and ordering an investigation into the possibility of tariffs on copper and wood. On Monday, Trump added agricultural products to his tariff target list.
Source link:
https://www.ctvnews.ca/business/article/deadline-for-trumps-tariffs-passes-with-no-relent-canada-counters-in-response/