While Canada and Mexico have taken measures to address U.S. concerns, China’s response remains muted, potentially setting the stage for further trade tensions.
A global stock selloff extended from Asia into Europe as investors worried that President Donald Trump’s planned tariffs on Canada, Mexico, and China could hurt economic growth. Asian shares fell as much as 2.5%, while the dollar strengthened. Trump announced 25% tariffs on Canada and Mexico starting March 4, with Chinese imports facing an additional 10% levy.
Economists warn the move could slow U.S. growth, fuel inflation, and trigger recessions in Mexico and Canada. China vowed “all necessary measures” in response, while Hong Kong saw some of the biggest losses, particularly in Chinese tech stocks.
The euro is at risk of further falls as markets are not fully priced for the prospect of a global trade war, ING analyst Chris Turner says in a note.
The U.S. economy is also showing early signs of strain as President Trump’s aggressive tariffs and federal spending cuts disrupt businesses, weaken consumer confidence, and spark concerns over inflation.
Economists warn that escalating trade tensions and regulatory uncertainty could further dampen growth, with projections of higher inflation and slower economic expansion. While the administration insists its policies will strengthen the private sector, financial markets and businesses remain uneasy about the near-term outlook.
Trump Confirms Tariffs on Canada and Mexico, Additional Hike on China
President Trump announced that tariffs on imports from Canada and Mexico will take effect on March 4 as planned, citing inadequate efforts to curb drug trafficking.
Additionally, he declared a new 10% tariff on Chinese goods, doubling the previous levy imposed earlier this month. The move has drawn criticism from businesses and trade groups, warning of economic strain and higher consumer costs.
While Canada and Mexico have taken measures to address U.S. concerns, China’s response remains muted, potentially setting the stage for further trade tensions.
Mexico Extradites Top Cartel Figures to U.S.
In a historic crackdown on cartel operations, Mexico has transferred 29 high-profile cartel operatives to U.S. custody, including Rafael Caro Quintero, the infamous Sinaloa cartel leader wanted for decades.
The move, seen as a major victory for the Trump administration, signals increased co-operation between Mexican President Claudia Sheinbaum and U.S. authorities. Among those extradited is Miguel Ángel Treviño Morales, the notorious ex-leader of the Zetas cartel.
The mass transfer underscores ongoing diplomatic efforts to combat cartel violence and the drug trade across the U.S./Mexico border.
Will this and perhaps other measures that may be announced in the coming days be enough to impact the Trump threatened 25% tariffs on Mexico currently slated to take place March 4? Mexico authorities have arrested more than 700 people since early February, when President Claudia Sheinbaum agreed to deploy 10,000 National Guard troops along the U.S.-Mexico border. Sheinbaum said she was planning to have a telephone conversation with Trump in the coming days to follow up on the agreements reached by both leaders early this month. “We hope that we can make this call to close the agreement,” she said this week.
Canada’s ‘Fentanyl Czar’
As for Canada, it sent the country’s new “fentanyl czar” and cabinet ministers to meet with Trump’s border czar, Tom Homan, this week. Canada named the czar as part of an agreement earlier this month with Trump to increase its efforts to curb the amount of fentanyl crossing over from Canada to the U.S. Canada has argued that the amount of fentanyl seized at the Canadian border is a fraction of what is found at the southern border.
Even More U.S. Tariff Hikes Ahead
There are several actions set for April 2, from the completion of trade policy reviews ordered on Inauguration Day to the unveiling of 25% tariffs on automobiles, pharmaceuticals and semiconductors.
That is also the planned date for the announcement of Trump’s levies on reciprocal trade, which will seek to equalize U.S. tariffs with the duties and nontariff barriers imposed by other nations.
A White House official said a report will be released on April 2 that will “outline the equivalent tariff rate” for other nations and the “mechanics for how they would be implemented.” Details for some countries might be released before others, the official added. The official also declined to comment on the timeline for reciprocal tariffs, but said any talk of a bottleneck in implementing the trade agenda is “premature.”
Trump Trade Strategy Unfolding
Trump administration officials believe that a trade policy combining reciprocal trade action with sector-specific tariffs would be legally stronger and cause less disruption than a broad tariff approach.
This strategy would still allow the U.S. to impose tariffs on significant parts of the economy while minimizing harm to consumers and markets. The sectoral tariffs, particularly on steel, aluminum, and copper, could be announced on April 2. However, their implementation would likely fall under Section 232 of the Trade Expansion Act, which permits tariffs on national security grounds.
This process generally requires a 30-day notice and comment period, except for steel and aluminum tariffs, which are based on an existing investigation and may be enacted more quickly.
You can now read the most important #news on #eDairyNews #Whatsapp channels!!!
🇺🇸 eDairy News INGLÊS: https://whatsapp.com/channel/0029VaKsjzGDTkJyIN6hcP1K
