US President Donald Trump on Saturday imposed sweeping tariffs against major trade partners Canada and Mexico, with an additional 10 percent duty levied on Chinese goods. The decision has sparked immediate retaliatory measures from Beijing, exacerbating tensions between the world’s largest economies.
In response to the tariff hikes, China announced levies of 15 percent on US coal and liquefied natural gas imports, while crude oil, agricultural machinery, big-engined vehicles, and pickup trucks now face 10 percent duties. According to Beijing customs data, China imported over $7 billion worth of US energy exports last year. However, this figure pales in comparison to the $94 billion worth of imports from Russia, highlighting Beijing’s strategic diversification of trade partners.
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Beijing condemned the US decision as a violation of World Trade Organization (WTO) rules and vowed to file a formal complaint. Chinese authorities also launched a probe into US tech giant Google and added American companies PVH Corp. and Illumina to its “unreliable entities” list. Additionally, China introduced new export controls on rare metals crucial to various industrial applications, further complicating global supply chains.
President Trump justified the tariffs as a means to curb illegal migration and drug trafficking, particularly fentanyl, into the United States. However, last-minute agreements with Mexico and Canada resulted in a temporary 30-day suspension of some proposed levies. Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau agreed to enhance border security, with Mexico committing 10,000 troops to its northern border and Canada pledging to deploy nearly 10,000 frontline officers.
Despite these concessions, tensions between the US and Canada remain high. Trump, in a series of statements, claimed Trudeau had agreed to stricter border controls. However, Canada’s response has included economic countermeasures such as barring US firms from bidding on government contracts and terminating a deal with Elon Musk’s Starlink.
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Global financial markets reacted sharply to the trade developments. Asian equities initially surged on news of the paused tariffs but later retracted as China announced its countermeasures. Economists warn that prolonged trade disputes could destabilize global supply chains and dampen economic growth.
Trump’s actions have also triggered political turmoil in Canada, where mounting pressure over trade uncertainties led to Trudeau’s resignation announcement. The country is now poised for early elections, adding further uncertainty to North American trade relations.
Meanwhile, Trump’s assertion that Canada should consider becoming the 51st US state has ignited a wave of nationalist sentiment in Canada, leading to public protests, boycotts of American products, and diplomatic friction.
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