Trump starts trade war

2025-01-31 22:44:00, Kosova & Bota CNA

United States President Donald Trump will impose a 25 percent tariff on imports from Canada and Mexico, and a 10 percent tariff on goods from China starting this Saturday, the White House announced on Friday.

Trump has long threatened to impose tariffs to secure greater cooperation from these countries in preventing illegal immigration and smuggling of chemicals used for fentanyl.

He has also pledged to use the tariffs to boost domestic production and increase revenue for the federal government.

"Beginning tomorrow, these tariffs will go into effect," White House spokeswoman Caroline Leavitt told reporters on Friday.

"These are promises made and kept by the president," she added.

The tariffs pose both political and economic risks for Trump, who took office for a second term just two weeks ago.

Many voters supported Trump after his promise to reduce inflation, but the tariffs could lead to price increases and disrupt the energy, auto, lumber and agriculture sectors, the Associated Press reports.

Trump had said he was considering exemptions for oil imports from Canada and Mexico, but Leavitt said he has no information about a possible decision by the president on exemptions.

According to the Energy Information Administration, the U.S. imported nearly 4.6 million barrels of oil per day from Canada in October and 563,000 barrels from Mexico. Meanwhile, U.S. domestic production during that month averaged 13.5 million barrels per day.

Trump has previously stated that a 10 percent tariff on Chinese imports would be added on top of other existing taxes on products from China.

Canada and Mexico have warned that they are prepared to impose retaliatory tariffs if necessary, which could trigger a broader trade conflict and, according to economic analysts, could hurt economic growth and accelerate inflation.

Canadian Prime Minister Justin Trudeau said Friday that Canada is ready to respond if Trump implements tariffs, but did not provide details.

"We have a response ready - a deliberate, forceful, but reasonable and immediate response," he said. "It's not what we want, but if he acts, we will act."

Mexican President Claudia Sheinbaum said Friday that Mexico has been in dialogue with Trump's team even before he returned to the White House, but stressed that the country has "Plan A, Plan B and Plan C" to react to any US decision.

A study this month by Warwick McKibbin and Marcus Noland of the Peterson Institute for International Economics concluded that a 25 percent tariff on Canada and Mexico and a 10 percent tariff on China "would hurt all economies involved, including the U.S."