Donald Trump was last night set to impose stringent tariffs on China, Mexico and Canada in what many fear will spark a global trade war.
President Trump was set to announce tariffs of 25 per cent on goods from Mexico and Canada and 10 per cent on Chinese products, which could disrupt more than $2.1 trillion (£1.69 trillion) in annual trade between those nations and America.
On Friday Mr Trump told reporters he would impose the tariffs as ‘punishment’ on three of the US’s largest trade partners for allowing drugs and migrants to flood into the US.
The levies – on products such as computer chips, steel, oil, gas and cars – ‘will bring a tremendous amount of money in for our country and bring a rebirth in American manufacturing’, he said. Canada is America’s biggest foreign supplier of crude oil, followed by Mexico.
Mark Carney, frontrunner to replace Justin Trudeau as Canada’s prime minister, has vowed that his country will hit back.
The former governor of the Bank of England said: ‘President Trump probably thinks Canada will cave in. But we are going to stand up to a bully, we’re not going to back down. We’re united and we will retaliate.’
Mr Trump put tariffs at the centre of his election campaign, citing an era more than a century ago when tariffs were a cornerstone of US trade policy and revenue.
He said: ‘It was a beautiful time. I love big, bold beautiful tariffs. They protect American businesses and encourage Americans to buy homegrown goods. I will use them as a way to punish those who continue to allow our country to be flooded with killer drugs like fentanyl and those who allow illegal aliens to pour over our borders.’
Mr Trump has warned he will impose future tariffs on the European Union as punishment for its ‘horrible treatment of America’ but has yet to mention the UK in any of his plans.
Donald Trump said he would impose tariffs of 25 per cent on goods from Canada and Mexico, and 10 per cent from China
Crates of avocados in Mexico. Mr Trump’s move threatens to derail the $1.6 trillion trade between the US and its neighbouring countries
Sir Keir Starmer has said he is anxious to secure a trade deal with the US and sources in Washington tell the MoS that ‘talks are ongoing about Sir Keir coming to the White House for in-person talks’.
Mr Trump’s tariffs threaten to disrupt the $1.6 trillion trade between Canada and Mexico and the US each year.
Professor David Ortega, an economist at Michigan State University, said they could end up punishing American consumers by driving up prices.
He said: ‘Tariffs drive up the cost of goods domestically by increasing production costs and reducing competition. The higher costs get passed on to consumers with low-income households bearing the brunt of the burden.’
Sir Keir Starmer has said he is keen to secure a trade deal with the US, with talks ongoing about the PM visiting the White House for talks, according to sources
China has threatened to retaliate against the measures, which critics say will result in American consumers being punished by higher prices
China, Canada and Mexico have all threatened to retaliate against the measures. Canadian officials have outlined plans to impose higher taxes on orange juice from Florida and electric cars made by Tesla, a company owned by Mr Trump’s ‘First Buddy’, Elon Musk.
Mr Trump put tariffs on Chinese imports during his first term in office and ended up bailing out US farmers who saw export revenues plunge by $10 billion after China retaliated.
On Monday the President insisted his tariffs would be a useful ‘bargaining tool’ with other governments.
‘We have the biggest piggy bank, we can’t lose,’ he said.
