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- U.S. tariffs on Canada and Mexico set at 25%, effective Tuesday.
- China faces increased tariffs of 20% due to fentanyl concerns.
- Stock markets tumble, with major automakers hit hard.
The U.S. is pressing forward with steep tariffs on imports from Canada, Mexico, and China. President Donald Trump announced that the 25% duty on goods from Canada and Mexico will take effect on Tuesday. The Chinese tariff rate will also rise from 10% to 20%, throwing financial markets into turmoil. Stock prices dropped sharply after Trump’s announcement.
Automaker shares saw a major decline, with General Motors and Ford suffering significant losses. The Mexican peso and Canadian dollar weakened against the U.S. dollar. Experts warn that the tariffs will disrupt supply chains and raise consumer prices.
Trade War Deepens with Canada’s Billion-Dollar Response
Canada responded swiftly, promising countermeasures worth C$155 billion. Prime Minister Justin Trudeau confirmed that an initial C$30 billion in tariffs would take effect simultaneously with the U.S. duties. If the U.S. does not withdraw its tariffs, more retaliatory measures will follow.
China’s government also condemned the decision and vowed to impose tariffs on American agricultural goods. The Global Times, a state-backed newspaper, hinted at a potential focus on U.S. food exports, which could hurt American farmers. Beijing has repeatedly denied U.S. claims that it is not addressing fentanyl exports.
Economic Instability Looms as U.S. Pushes New Trade Policies
Economists warn that the tariffs could lead to higher inflation and economic instability. Trade experts predict that automobile prices will rise due to supply chain disruptions. Some U.S. lawmakers have criticized the move, arguing that it will increase costs for American consumers.
Mexico has yet to announce specific countermeasures but stated that President Claudia Sheinbaum will address the issue in her Tuesday press conference. Ontario Premier Doug Ford labeled the tariffs a disaster, warning of factory shutdowns and energy export cuts.
Trump, however, remains firm on his decision. White House trade adviser Peter Navarro dismissed inflation concerns, stating that the economic impact will be minimal. Meanwhile, Trump has initiated new trade investigations into lumber, copper, and digital service taxes. Analysts fear these aggressive trade policies may push the global economy toward recession.
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