Donald Trump has announced that tariffs on Canada, China, and Mexico will take effect on 1 February. These countries are America’s three-largest trading partners.
A tariff is a tax paid by importers when buying certain goods from specified countries.
Tariffs do protect domestic firms’ revenues, but they also result in higher prices for consumers.
White House press secretary Karoline Leavitt said that Canadian and Mexican goods would be targeted with a 25 per cent tariff, while Chinese goods would receive a 10 per cent tariff.
Trump threatened to impose tariffs on these countries in November, accusing them of enabling illegal immigration into America and failing to halt the trade of fentanyl, an illegal and deadly opioid.
Echoing a familiar phrase of Trump supporters, Leavitt said of the tariffs: “These are promises made and promises kept by the president.”
Trump’s decision could unleash the first trade war of his administration.
Canada and Mexico are already expected to assemble a package of retaliatory tariffs on American goods. China is likely to take similar action.
“We’re ready with a response – purposeful, forceful but reasonable, immediate response,” Canadian Prime Minister Justin Trudeau said.
This is a developing story.
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