- On Tuesday, President Trump enforced 25% tariffs on imports from Mexico and Canada.
- Tariffs on Chinese goods doubled, reaching 20% from 10%.
- Canada and China team up, retaliating over tariffs with Trump— Mexico to follow.
- The increase in tariffs is an open threat to the North American economy.
March 5, 2025—President Donald Trump again made it to the headlines, but this time, it wasn’t just about Bitcoin’s bearish season but over the economic confrontations. Donald Trump’s administration enforced increased tariffs on imports from Canada and Mexico. Not also, that but doubling tariffs on China from 10% to 20%.
The enforcement was made to pressure the USA trade partners, aiming to address Trump’s administration’s concerns over increasing drug trafficking and economic imbalances. However, this has ignited swift retaliatory actions—could it be the start of the trade war?
A Major Blow to North American Trade
The new tariffs took place on Tuesday, 5 March 2025, covering the $1.4 trillion worth of goods—accounting for over 40% of total U.S. imports—from Mexico and Canada. While the Mexican government is quiet so far, saying they will respond in their way with new tariffs, Canadian Prime Minister, “Justin Trudeau,” isn’t taking the situation lightly.
“What a dumb thing to do it was,” says Trudeau at a news conference. The Canadian government said they would not back down from a fight and would retaliate by implementing a 25% tariff on $20.7 worth of US goods immediately, followed by additional tariffs on $86.2 billion within the 21-day timeframe.
If not sorted, this could massively impact trade flow to North America, affecting key industries, including energy products, electronics, fresh produce, and automobiles. Could this further strain the already fragile American economy?
China’s Aggressive Countermeasures
While the Trump administration might have forgotten, China accounts for major import flow to the USA. Businesses like Amazon import 71% of goods from China. If China said no to exporting, what’s next?
On Tuesday, China wasted no time in implementing counter-tariffs on the USA, implementing 15% tariffs on agricultural products, including wheat, corn, chicken, and cotton. Additionally, a 10% tariff on beef, dairy, pork, soybean, and other food products.
If you think this is the end, there’s more to come. China’s Ministry of Commerce blacklisted 15 American companies. What to name this smooth move?
Economic Fallout Begins?
The global stock market is facing a sharp decline. Volkswagen and Stellantis (Chrysler & Jeep), major automakers with plants in Mexico, dropped sharply, Volkswagen by 4% and Stellantis by 7%.
The USA consumers and businesses are fearing increased costs, majorly affecting electronics, cars, food, and other everyday goods. It might also raise high inflation and slow consumer spending.
Political and Trade Fallout
The enforced tariffs have sparked a political firestorm within and outside the USA. Ontario’s Premier Doug Ford intimidated to cut off energy exports to the USA as Eastern America majorly relies on Canadian energy, and this trade war feels like pain!
Trudeau announces Canada will challenge Donald Trump’s administration through the World Trade Organization (WTO) and the USMCA trade agreement.
What’s Next?
With China, Canada, and Mexico preparing for countermeasures, the global financial market is on the edge. The White House confirmed that a “Reciprocal Tariff” policy will go into action on April 2, 2025, so all countries that enforce raised tariffs on the USA will receive matched tariffs.
If the trade war is prolonged, this could drive inflation even higher, slow economic growth, and disrupt supply chains in the USA and beyond.
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