Trump’s World Trade War sets stock markets tumbling after Mexico and Canada vow to hit back with revenge sanctions
PRESIDENT Donald Trump has sent stock markets tumbling after Mexico and Canada vowed to hit back with revenge sanctions.
The newly-inaugurated president slammed those opposing the tariffs, saying the US was no longer going to be the “stupid country” that was subsidizing others.
Trump has slapped a 25 per cent tariff on all imports from Canada and Mexico and add another 10 per cent tariff on to Chinese trade.
Energy, like oil and natural gas, imported from Canada was also only hit with a 10 per cent tariff.
Trump believes the taxes are “worth the price” to stopping the manufacture and import of the deadly drug fentanyl.
Amidst the trade war chaos sparked by Trump, the Republican slammed the European Union and warned tariffs on goods from its 27 member states will “definitely happen”.
In the same breath he refused to rule out tariffs on the UK and called the country “out of line” – but hinted that a deal could be worked out.
Trump explained to the BBC: “It might happen with that, but it will definitely happen with the European Union.
“I can tell you that, because they’ve really taken advantage of I said, you know, we have over $300 billion deficit.”
He said how the EU doesn’t take America’s cars or “farm products,” summarising that “they take almost nothing” meanwhile “we take everything”.
Trump added: “So the UK is way out of line, and we’ll see the UK, but European Union is really out of line.
“UK is out of line. But I’m sure that one can be worked out, Prime Minister Starmer has been very nice.”
Meanwhile Mexico has announced condemnatory retaliatory tariffs on the US.
Mexican President Claudia Sheinbaum ordered the mysterious “Plan B” to go into effect which “includes tariff and non-tariff measures” in a lengthy X post.
She said that her government sought dialogue over confrontation with the US – but now Mexico has had to respond with similar force.
While no specifics have been provided on Plan B, Mexico has previously suggested it would impose levies ranging from 5 to a whopping 20 per cent.
These would be put on pork, cheese, fresh produce, steel and aluminium.
Mexico also supplies 90 per cent of avocado bought and enjoyed by Americans.
Prior to the response, President Sheinbaum slammed Trump for suggesting “the Mexican government has alliances with criminal organizations”.
She said Trump should instead “fight the sale of drugs on the streets of their major cities, which they don’t do”.
It comes as Canada’s Prime Minister Justin Trudeau said in a news conference last night that he will impose 25 per cent retaliatory tariffs on US goods worth an eye-watering $107 billion.
Trudeau delivered the announcement in a somber tone, channelling the betrayal that many Canadians are feeling.
He reminded Americans that Canadian troops fought alongside them in Afghanistan and helped respond to myriad crises from wildfires in California to Hurricane Katrina.
Trudeau said: “We were always there standing with you, grieving with you, the American people.
“It is going to have real consequences for people, for workers on both sides of our border. We dont want to be here.
“We didn’t ask for this, but we will not back down in standing up both for Canadians and for the incredible successful relationship between Canada and the United States.”
But the CEO of Canada’s second largest company has slammed Trudeau for not stopping the spiralling trade war.
What are Trump’s new tariffs and how have countries hit back?
DONALD Trump has started a trade war after he slapped steep tariffs on imports from Canada and Mexico - with more to follow.
Canada
Trump announced he is imposing 25 per cent tariffs on imports from Canada on most goods, and 10 per cent on Canadian oil.
Canada’s Prime Minister Justin Trudeau said in a news conference on Sunday that, in response, he will impose 25 per cent retaliatory tariffs on US goods worth an eye-watering $107 billion.
This could range from beer to household appliances.
Trudeau delivered the announcement in a somber tone, channelling the betrayal that many Canadians are feeling.
He reminded Americans that Canadian troops fought alongside them in Afghanistan and helped respond to myriad crises from wildfires in California to Hurricane Katrina.
Trudeau said: “We were always there standing with you, grieving with you, the American people.
“It is going to have real consequences for people, for workers on both sides of our border. We dont want to be here.
“We didn’t ask for this, but we will not back down in standing up both for Canadians and for the incredible successful relationship between Canada and the United States.”
Mexico
Trump has slapped 25 per cent tariffs on all imports from Mexico.
Mexico has announced condemnatory retaliatory tariffs on the US.
Mexican President Claudia Sheinbaum ordered the “Plan B” to go into effect which “includes tariff and non-tariff measures” in a X post.
She said that her government sought dialogue over confrontation with the US – but now Mexico has had to respond with similar force.
While no specifics have been provided on Plan B, Mexico has previously suggested it would impose levies ranging from 5 to a whopping 20 per cent.
These would be put on pork, cheese, fresh produce, steel and aluminium.
Mexico also supplies 90 per cent of avocado bought and enjoyed by Americans.
China
Trump has slapped 10 per cent tariffs as he believes China is “sending fentanyl to Mexico and Canada”.
China says the threatened tariffs are a “serious violation” of the World Trade Organization rules.
The country is therefore filing a lawsuit with the WTO against the US for “wrongful practice”.
The EU and UK
It remains unclear what tariffs on EU goods or the UK.
A European Commission spokesperson said the EU will “respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods”.
Tobi Lutke, who co-founded Shopify and is worth an estimated $10 billion, wrote on X: “Canada thrives when it works with America together. Win by helping America win.
“Trump believes that Canada has not held its side of the bargain.”
He adds that Trump’s demands “are things that every Canadian wants its government to do too”.
Markets have been tumbling in reaction to Trump’s tariffs, with London’s FTSE 100 Index taking a fall of over 1 per cent on opening.
And the blue chip share index fell by around 1.2 per cent soon after the London market began trading at 8am.
Shares on Asian markets also tumbled in early trade, like Japan’s Nikkei opening down 2.9 per cent on Monday morning.
Australia’s benchmark, which is often a proxy trade for Chinese markets, also fell 1.8 per cent.
Stocks in Hong Kong fell a devastating 1.1 per cent, including listings of Chinese companies.
Trump believes the taxes are “worth the price” to stopping the manufacture and import of the deadly drug fentanyl and ending the “RIPOFF OF AMERICA”.
He said his tariffs could bring some pain to the economy, but that is the “PRICE THAT MUST BE PAID” to end trade deficits with Canada, Mexico and China.
In a post on TruthSocial on Sunday, he said: “MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS!!”