The United States has imposed a 25% tariff on Canada-Mexico, and raised it to 20% on China

The Trump administration of the United States officially implemented an additional 25% tariff on imports from Canada and Mexico on March 4. In addition, the United States had previously imposed a 10% tariff on Chinese goods in February, and the tariff rate was further increased to 20%. Since these three countries account for 40% of the total imports and exports of the United States, this move may trigger a full-scale trade war.

The United States had previously imposed an additional 10% tariff on Chinese goods on February 4, and Trump signed a presidential executive order on March 3 to increase the tariff rate to 20%. Regarding whether the tariff will be further increased to more than 20%, Trump said: “It will depend on how they (China) deal with their own currency and whether they take retaliatory measures.”

During the campaign, Trump said that he was considering raising the additional tariff on China to 60%. Trump is optimistic about the retaliatory measures that China may take, believing that “China will not retaliate too much.”

The Chinese government announced on March 4 that it would impose additional tariffs of up to 15% on wheat, corn and other commodities imported from the United States from March 10. This move is a retaliatory measure against US President Trump’s increase in additional tariffs on China from 10% to 20% on the 4th.

The 15% additional tariff applies to wheat, corn, chicken and cotton. In addition, soybeans, pork, beef, aquatic products, vegetables, sorghum and fruits will be subject to an additional 10% tariff. China’s Ministry of Commerce said on the 4th that it has again filed a lawsuit against the United States at the World Trade Organization (WTO).

On February 10, China had retaliated against the 10% tariff imposed by the United States, imposing an additional tariff of up to 15% on coal and liquefied natural gas (LNG) exported from the United States to China. This tariff measure is China’s second round of retaliatory actions against the United States.

The 25% tariff on Canada and Mexico officially took effect at 0:01 a.m. Eastern Time on the 4th (1:01 p.m. Beijing Time on the 4th). Goods imported or extracted from US bonded warehouses after this time will be subject to new tariffs.

In order to reduce the impact on the United States, the tariff rate on key minerals such as oil, natural gas, coal, lithium, and uranium exported from Canada to the United States will be reduced to 10%.

President Trump implemented this series of measures in accordance with the International Emergency Economic Powers Act (IEEPA) under the exercise of presidential authority. He identified the influx of illegal drugs fentanyl as a “national emergency” and said that the tariff measures will continue until Mexico and Canada take adequate countermeasures.

The United States, Canada and Mexico originally eliminated tariffs on most imported goods under the framework of the Free Trade Agreement (FTA). But Trump’s decision caused the original 0% tariff to rise suddenly to 25%.

The Canadian government said on March 3 that if the United States imposes additional tariffs, Canada will immediately impose a 25% retaliatory tariff on American motorcycles, whiskey and other goods. Mexico has also hinted that it may take countermeasures, which may trigger a retaliatory war between members of the free trade agreement.

The United States is also concerned about raising tariffs on Canada, Mexico and China. The American Farm Bureau Federation (AFBF), the largest agricultural organization in the United States, said on February 28 that American farmers would “become direct victims of retaliatory tariffs” and pointed out that “Canada is also a major supplier of fertilizers”, so it had requested a postponement of the tariff increase.

However, Trump did not accept this request and said on his social media that he planned to increase tariffs on imported agricultural products from April 2. He called on American agricultural stakeholders to “increase domestic agricultural product production” to make up for export losses caused by foreign retaliatory measures so that these products can be sold domestically in the United States.

Trump signed a presidential executive order on tariff measures against these three countries in February, and announced that the United States was in a “state of emergency” due to the influx of illegal immigrants and the banned drug fentanyl, so he decided to implement tariff measures and asked countries to take countermeasures.

In addition, Trump also said that he was considering imposing a tariff of “about 25%” on imported cars and may impose tariffs on imports from the European Union (EU).

Currently, the Office of the United States Trade Representative (USTR), the US Department of Commerce and the US Treasury are investigating the trade practices of various countries. It is expected that after the investigation results are released, the US government will announce the overall plan of “Trump tariffs” on April 2.