Canada announced retaliatory tariffs on US imports worth around $30 billion after the tariffs on US tariffs and aluminum imports came into effect Wednesday.
The Canadian government has said it will follow a “dollar-by-dollar” approach and will follow a 25% tariff on US import duties, including steel, computers and sports goods.
Donald Trump first announced tariffs on all steel and aluminum imports in February, scheduled for it to come into effect Wednesday. Tariffs have launched a chain reaction of retaliatory tariffs as countries around the world decide how to respond to Trump’s policies.
The Canada announcement comes after the EU announced its own tariffs on US imports, including products such as motorcycles and whiskey.
Trump doubled the tariffs on steel and aluminum on Canada, and retaliation against Canada has increased the price of electricity exports to the US to 50%. However, the White House dropped its measures after Canada said it would lower its electricity bills.
Meanwhile, Mexican President Claudia Sheinbaum said the country will wait until April 2 to determine whether it will respond to tariffs on steel and aluminum.
Trump initially announced a 25% tariff on all imports from Canada and Mexico. The duties are currently expected to come into effect on April 2nd.
Canadian and EU leaders expressed regret over the impact of tariffs on domestic businesses, but argued that the country needs to respond appropriately to Trump’s actions
The country’s foreign minister, Melanie Jolly, said at a press conference Wednesday that the country “will not retreat and will not be caught up in this forced affair,” accusing Trump of continuing on the global economy.
“The only constant in this unfair and unfair trade war seems to be President Trump’s consultation to annex our country through economic coercion,” Jolie said at a press conference.
European Commission President Ursula von der Leyen said tariffs on steel and aluminum were “unfair trade restrictions.” “Taxes are taxes. They are bad for businesses, bad for consumers. They are disrupting the supply chain. They create uncertainty in the economy,” she said.
Despite criticism from global leaders, Trump defended tariffs after meeting with Business Roundtable, a group of leading American business leaders on Tuesday. “The market is going to rise and they’re going to go down, but what do you know? We have to rebuild our country,” Trump said Tuesday.
After a week-long slump, the US market began to make small profits Tuesday morning after better inflation numbers than expected.
Trump and his administration members spent last week at the cable news circuit, disregarding the impact of tariffs on the economy. When asked in an interview with Fox News on Sunday if the US could experience a recession, Trump said the country was in a “transition period.”
“What we do is huge. We bring wealth back to America. That’s a big deal. And there’s always a period and it takes a little time. It takes a little time, but I think it should be great for us,” Trump said.
Kevin Hassett, head of the National Economic Council, told CNBC on Monday that Trump’s economic policies had a deliberate impact of “creating jobs in the United States,” and told CNBC there were many reasons for being “busy for the future.”
Uncertainty over Trump’s trade policy has led Federal Reserve officials to make sure they won’t change interest rates at next week’s meeting. Fed Chairman Jerome Powell said last week in a prepared statement that “there is growing uncertainty about the economic outlook,” but for now the economy is stable.
“It remains to be seen how these developments will affect future spending and investments,” he said.
Meanwhile, a new Reuters/Ipsos poll found that most Americans have found Trump’s recent economic behavior was “too unstable.” About 70% of respondents over 1,400 (including nine in 10 Democrats and six in 10 Republicans) expect higher tariffs to make groceries and other purchases more expensive. Instead, Americans hope that Trump will continue to focus on fighting high prices, despite growing concerns that his policies will drive costs rather than decline.
Reuters contributed to the report
