• HOME»
  • United States»
  • How Donald Trump’s Tariffs Spark Trade War Fears and Affect Countries

How Donald Trump’s Tariffs Spark Trade War Fears and Affect Countries

President Trump’s tariffs on key trading partners Canada, Mexico, and China raise fears of a trade war and economic disruption for both sides.

Advertisement
How Donald Trump’s Tariffs Spark Trade War Fears and Affect Countries

Newly sworn-in US President Donald Trump has set off what many are terming the start of a “trade war” by imposing tariffs on imports from Canada, Mexico, and China. Citing a “major threat” posed by illegal immigration and drug trafficking, Trump exercised emergency economic powers to introduce tariffs that could have widespread economic implications for the global trade landscape.

Beginning on Tuesday, all goods exported to the US from Canada and Mexico will face a 25% tariff, and Canada’s energy resources will attract a reduced tariff of 10%. China, which is already facing tariffs, will face another 10% duty on its products.

What Is a Trade War?

The practice of retaliating against another nation’s perceived unfair trade practices with tariffs or other trade barriers is known as a trade war. It is seen as a form of protest for a country’s trade practices or to protect one’s own country’s industries from foreign competition. However, that may harm a country’s people, as there is no possible production domestically without tariffs.

The current trade war between the US and its major trading partners, including China, Canada, and Mexico, is a fresh example of how such actions become escalated in the form of full-blown trade war. This time, with tariffs in place, the economic fallout may be quite severe for both the US and its partners.

US Tariffs and Their Impact on Trade Relations

President Trump’s 25% tariff on imports from Canada and Mexico stems from concerns over the flow of fentanyl and undocumented immigration from the two neighboring countries. An additional 10% tariff on Chinese imports targets the nation’s role in fentanyl supply, escalating the already strained trade relations between the US and China.

Canada was quick to retaliate with a 25% tariff on goods made in the US, and Mexico has said it too will impose such tariffs. Tariffs could also lead to increased prices for daily essentials, thereby piling pressure on the common consumer.

China has not responded officially but may impose its tariffs, adding another layer of uncertainty to the whole situation.

Economic Implications of the Tariffs

The three countries targeted by Trump account for an important percentage of goods that the US imports: one-third of all its imports come from Canada, Mexico, and China. Fruits and vegetables, meat, gasoline, automobiles, electronics, clothing, lumber, and alcoholic beverages including beer and spirits are typical products supplied to the US by these countries.

The US Chamber of Commerce issued a warning, saying that the Trump administration should rethink the tariffs. They said that tariffs will not solve the problem at the border and may cause disruption in the supply chain, increasing costs for American families.

“When you talk about a tariff, it’s an economic war; and in war, everybody loses,” said a spokesperson for the Chamber. “But hopefully we will come to some better results and conclusions as a result of the pain and suffering that we will go through.”

Possible Long-Term Effects on Global Trade

The imposition of tariffs on key trade partners threatens long-term economic consequences. Both the US and its trading partners would face economic disruption due to a rise in costs of goods and being made to adapt to new trade barriers in business.

For now, all eyes are watching as the new economic strategy unfurls in America, with every one wondering which way these tariffs will finally direct future trade, commerce, or global relations in the long term.