U.S. tariffs against Canada and Mexico will go ahead on Tuesday but their level will be decided by Donald Trump, the U.S. commerce secretary has said.
Trump has threatened to impose 25 per cent tariffs – which are a tax on imports – on his two neighbours on March 4, in response to what he says is an unacceptable flow of illegal drugs and migrants into the U.S.
U.S. Commerce Secretary Howard Lutnick said yesterday the tariffs would happen as planned but the exact details will depend on negotiations. A 10% tariff on Chinese imports is also expected to be implemented in response to U.S. accusations that Beijing is not doing enough to stop the flow of fentanyl into the U.S.
This means that if brought into effect, Chinese exports to the U.S. will face a levy of at least 20 per cent, following a 10 per cent tariff that took effect a month ago.
Chinese state media claims leaders in Beijing have prepared a series of countermeasures to happen on the same day, raising the prospect of an all-out trade war between the world’s top two economies.
China’s state-run Global Times newspaper said the countermeasures would probably target US agricultural and food products. Analysts believe Beijing still hopes to avoid an all-out trade war and negotiate a truce with the Trump administration, but so far there has been no sign of a deal between the two economic giants.
Trump has long maintained that tariffs are a useful tool to correct trade imbalances and protect US manufacturing. Canada has repeatedly said tariffs will harm both economies but added that it will defend itself if they happen.
Canadian Internal Trade Minister Anita Anand met officials in Washington in recent days and said over the weekend there will be a response.
“We are steady at the wheel. We are prepared for any eventuality, but we will at every turn defend our country’s economy,” she told CBC News.
Last month, Canada had prepared a list of $30bn (£23.6bn) worth of American goods it said it would levy in response to US tariffs. Items on that list included everyday goods like pasta, clothing and perfume.
