Reuters Videos
STORY: Fresh trade wars kicked off Tuesday between the U.S. and its top three trading partners – Canada, Mexico and China - with new, steep tariffs from Washington taking effect and triggering retaliation.On Monday night, U.S. President Donald Trump accused all three targeted countries of failing to stop the flow of fentanyl into the U.S.Just after midnight on the U.S. East Coast, Canadian and Mexican goods were hit with tariffs of 25%.And Trump's new tariffs on Chinese goods were doubled by an extra 10% - to a cumulative 20%.Those new tariffs will apply to some major consumer electronics imported by the U.S., previously untouched by prior duties, including laptops, videogame consoles and Bluetooth devices.On Tuesday, China announced its own tariffs of 10% to 15% mostly targeting US agriculture, like soybeans, meats, and cotton, and added new export restrictions for designated U.S. entities.Speaking to reporters Tuesday, a Chinese parliamentary spokesperson said China was willing to resolve U.S. concerns through consultation and dialog, but will not accept threats and oppression.Meanwhile U.S. tariffs on goods from Mexico and Canada will likely cause deeper repercussions for the highly integrated North American economy.Canada and Mexico have for decades enjoyed a virtually tariff-free trading relationship with the U.S.After Trump confirmed tariffs would proceed, financial markets reeled, and global stocks tumbled. Both the Canadian dollar and Mexican peso fell against the dollar.Automaker shares fell sharply, especially for major firms General Motors and Ford who have production lines in Mexico. Speaking to Reuters, Chris Brigati, chief investment officer of Southwest Business Corporation, says consumers will bear the brunt of Trump’s tariffs: “The tariff situation and its effect on the domestic U.S. economy are really a bigger concern now that we have a more aggressive stance coming out of Washington. And that being said, the stagflation issue is rearing its head. And stagflation is quite simply a stagnant or or if not rising, a stable inflation rate but a declining economic base, and I expect these specific tariffs to be damaging to the economy while increasing the prices of goods and services."Canadian Prime Minister Justin Trudeau said on Monday Ottawa would hit back with 25% tariffs on up to about $107 billion worth of U.S. goods. Mexico’s economy ministry said President Claudia Sheinbaum is expected to announce her response Tuesday.On Tuesday markets responded to the news with stocks falling and bond yields sliding across Asia, and Japan's Nikkei closing down 1.2%.Trump's "America First" agenda, aimed at redrawing trade relationships in favor of the U.S., is expected to be a centerpiece of his Tuesday night address to a joint session of Congress.
