The possibility of a global trade war inched dangerously close to reality as Canada promised retaliatory tariffs as US President Donald Trump imposed fresh duties on imports from the neighbouring country.
The Trump administration followed through with its proposed tariffs on Canadian goods and 25 per cent duty on imports from the country became effective on March 4, 12:01 AM EST.
On March 3, Canadian Prime Minister Justin Trudeau warned that the country will respond to the American tariffs with its own.
Trudeau Says Trump Tariffs Violate FTA
On Monday, Trudeau said that Canada will impose 25 per cent tariffs on C$155 billion worth of US goods from Tuesday, while tariffs on the remaining C$125 billion of products will become effective in 21 days, reported Reuters.
“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” the Canadian PM said.
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Notably, Canada and Mexico have benefitted from a virtually tariff-free trading relationship with the US for about 30 years. Trudeau said that the latest tariffs would violate the US-Mexico-Canada free trade agreement signed by Donald Trump during his first term in office. “Tariffs will disrupt an incredibly successful trading relationship,” he added.
The tariffs on Canadian and Mexican goods could have deep repercussions for the US economy as well. Notably, the US depends heavily on cross-border trade to manufacture cars, process agricultural products, and refine energy.
Read More : Trade War Becomes A Reality As China Retaliates Against Fresh Tariffs From Donald Trump’s Administration
Tariffs A Tax On Americans, Says Candance Laing
Addressing the Trump administration’s tariffs decision, Candace Laing, Canadian Chamber of Commerce CEO, said, “Today’s reckless decision by the U.S. administration is forcing Canada and the U.S. toward recessions, job losses and economic disaster. Tariffs are a tax on the American people.”
Further, Laing cautioned that these tariffs will fail to deliver on the ‘golden age’ promised by Donald Trump, and rather increase prices for consumers and producers and harm supply chains.
