United States President Donald Trump has confirmed to reporters in the White House on Monday (Tuesday AEDT) that 25% taxes on imports from Mexico and Canada would start on 4 March (GMT -8) and has doubled China's tariffs from 10% to 20%.
“Tomorrow — tariffs 25% on Canada and 25% on Mexico. And that’ll start,” Trump said. “They’re going to have to have a tariff.”
The further taxes on imports into the U.S. are being implemented as a means to force its neighbours to step up cross-border drug trafficking and illegal immigration.
Yet the underlying impetus is Trump’s desire to eliminate Americas’ trade imbalances as well and push for more domestic production in the U.S.
When the tariffs were first announced early last month, both Canada and Mexico were quick to make deals with the Trump administration.
Find out more: Canada, Mexico bow to security calls; tariffs paused
Canadian Foreign Minister Melanie Joly said the tariffs represented an “existential threat” to the Canadian people, with thousands of jobs at stake, adding that the country was “ready with counter tariffs”.
Trump has also amended its levy on China due to inaction on curbing fentanyl production by doubling tariffs from 10% to 20%, “in recognition of the fact that the PRC has not taken adequate steps to alleviate the illicit drug crisis”.
Market mayhem
Markets fell sharply on the news, with the S&P 500 falling a sharp 1.8% and the Nasdaq dropping a whopping 2.6%.
This comes after about two weeks of mostly grim outlook data about rising inflation rises and unemployment - a stark comparison to what just a few months ago was a bustling economy.
The ASX was set to open lower too.
