China and Canada respond to Donald Trump’s new trade tariffs and create fear of an escalating trade war. The US has put into place 25% tariffs on imports from Canada and Mexico, and 20% tariffs on Chinese goods, which has created more world tension.
China has revealed new tariffs on some of the most important US agricultural products like chicken, wheat, corn and cotton and more tariffs on soybeans, pork, beef and dairy products. On the other hand, Canada has imposed 25 per cent tariffs on US$30 billion worth of products including beer, bourbon, appliances and orange juice. This is because Toronto has indicated that there will be more tariffs if the US does not lift its measures within the next 21 days.
The financial markets reacted strongly, with all the Asian markets down, the Canadian dollar and the Mexican peso at their lowest in a month, and the US dollar index at its weakest in three months. The FTSE 100, Germany’s Dax and France’s Cac 40 also fell.
Trump says that tariffs are good for the economy of the United States and that they would induce trade concessions from other countries. But economic analysts worry that these policies may raise consumer prices and disrupt supply chains. The Peterson Institute for International Economics found that the tariffs could cost American households more than $1,200 a year.
The government of China has criticized the tariffs, claiming that the United States is undermining the World Trade Organization. As the trade war heats up, businesses and consumers around the globe are getting ready for the economic consequences.
