US President Donald Trump has finally decided to impose heavy tariffs on Canada, Mexico and China. 25% tariffs have been implemented on goods coming from Canada and Mexico and 10% on goods imported from China.
Trump had already indicated that he could take this step to prevent illegal immigration, drug smuggling and the losses caused by the US economic policies. Now that this tariff is implemented, its effect can be clearly seen on global trade and economy.
White House’s big decision – when will the tariff come into force?
According to a Bloomberg report, White House officials have confirmed that President Trump has signed these tariff orders on Saturday. These will be effective from Tuesday and will apply to many products imported from Canada, Mexico and China.
The main point of the tariff:
- 25% tariff on Canada and Mexico
- 10% tariff on China
- If these countries retaliate against this tariff, then the US can increase the tariff.
This decision of the Trump administration can prove to be a major setback for the US business partners.
Why these tariffs were imposed?
Trump has given many arguments behind these tariffs, the main reasons are:
- Illegal immigration:
- The number of illegal migrants in the US from Mexico is steadily increasing, which has been pressured to stop.
- Drug smuggling:
- The Trump administration claims that the smuggling of illegal drugs in the US from Mexico and Canada is increasing.
- Trade deficit and US subsidy:
- The US has been giving huge financial assistance and business concessions to these countries, causing damage to the US economy.
The Trump administration believes that these tariffs can control these problems and the US will get financial strength.
Canada threatens counter tariffs
Bloomberg’s report states that Canada has prepared to impose counter tariffs (anti -counterparts) in response to these tariffs. This means that Canada can also impose additional fees on goods coming from America.
Possible effects:
- Direct effect on the automobile industry: Auto parts and vehicles have a large trade between the US, Canada and Mexico. This tariff can increase their prices.
- Energy sector affected: Canada and Mexico will affect the oil and gas exported to the US, which can increase energy prices.
- The risk of recession on Mexico’s economy: If this tariff runs for more than three months, the economy of Mexico may be in the grip of serious recession.
Will China also answer?
There is also speculation about the 10% tariffs imposed on China that the Beijing government may give retaliation to the US. China has already threatened to impose strict ban on American agricultural products and technology companies.
Possible effects:
- Electronics and tech products will be expensive.
- Sales of American companies in China will be affected.
- Global trade war may increase further.
Trump’s Policy – America First or Global Business Crisis?
This move of Donald Trump is considered part of his “America First” agenda. They believe that this policy will help save American jobs and strengthen domestic industries. But many economists consider it a step towards global trade war.
If these tariffs remain applicable for a long time, then it can affect not only America, but the economy of the whole world.
