Trade wars erupt as Trump hits Canada, Mexico, China with steep tariffs

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) -U.S. President Donald Trump's caller 25% tariffs connected imports from Mexico and Canada took effect connected Tuesday, on with a doubling of duties connected Chinese goods to 20%, launching caller commercialized conflicts with the apical 3 U.S. trading partners.

The tariff actions, which could upend astir $2.2 trillion successful two-way yearly U.S. commercialized went unrecorded astatine 12:01 a.m. EST (0501 GMT), hours aft Trump declared that each 3 countries had failed to bash capable to stem the travel of the deadly fentanyl opioid and its precursor chemicals into the U.S.

China responded instantly aft the deadline, announcing further tariffs of 10%-15% connected definite U.S. imports from March 10 and a bid of caller export restrictions for designated U.S. entities.

Canada and Mexico, which person enjoyed a virtually tariff-free trading narration with the U.S. for 3 decades, were poised to instantly retaliate against their longtime ally.

Canadian Prime Minister Justin Trudeau said Ottawa would respond with contiguous 25% tariffs connected C$30 cardinal ($20.7 billion) worthy of U.S. imports, and different C$125 cardinal ($86.2 billion) if Trump's tariffs were inactive successful spot successful 21 days. He said antecedently that Canada would people American beer, wine, bourbon, location appliances and Florida orangish juice.

"Tariffs volition disrupt an incredibly palmy trading relationship," Trudeau said, adding that they would interruption the U.S.-Mexico-Canada escaped commercialized statement signed by Trump during his archetypal term.

Ontario Premier Doug Ford told NBC that helium was acceptable to chopped disconnected shipments of nickel and transmission of energy from his state to the U.S. successful retaliation.

Mexican President Claudia Sheinbaum was expected to denote her effect during a greeting quality league successful Mexico City connected Tuesday, the country's system ministry said.

STACKING CHINA TARIFFS

The other 10% work connected Chinese goods adds to a 10% tariff imposed by Trump connected February 4 to punish Beijing implicit the U.S. fentanyl overdose crisis. The cumulative 20% work besides comes connected apical of tariffs of up to 25% imposed by Trump during his archetypal word connected immoderate $370 cardinal worthy of U.S. imports.

Some of these products saw U.S. tariffs summation sharply nether erstwhile president Joe Biden past year, including a doubling of duties connected Chinese semiconductors to 50% and a quadrupling of tariffs connected Chinese electrical vehicles to implicit 100%.

The 20% tariff volition use to respective large U.S. user electronics imports from China antecedently untouched by anterior duties, including smartphones, laptops, videogame consoles, smartwatches and speakers and Bluetooth devices.

China's caller tariffs announced connected Tuesday targeted a wide scope of U.S. cultivation products including definite meats, grains, cotton, fruit, vegetables and dairy products.

It besides added 15 U.S. entities to its export power database and 10 U.S. entities to its unreliable entity list.

The commerce ministry earlier successful the time said Washington mistakenly "shifted the blame" for its fentanyl situation to Beijing.

The state-backed Global Times paper said connected Monday Beijing's retaliation would astir apt people U.S. cultivation and nutrient products.

U.S. farmers were hard deed by Trump's first-term commercialized wars, which outgo them astir $27 cardinal successful mislaid export income and conceded stock of the Chinese marketplace to Brazil.

RECESSION FEARS

The tariffs connected Mexican and Canadian products could person overmuch deeper repercussions for a highly integrated North American system that depends connected cross-border shipments to physique cars and machinery, refine vigor and process cultivation goods.

"Today's reckless determination by the U.S. medication is forcing Canada and the U.S. toward recessions, occupation losses and economical disaster," Canadian Chamber of Commerce CEO Candace Laing said successful a statement.

She said the U.S. tariffs volition neglect to usher successful a "golden age" coveted by Trump but alternatively rise costs for consumers and producers and disrupt proviso chains. "Tariffs are a taxation connected the American people."

Matt Blunt, president of the American Automotive Policy Council representing Detroit automakers, called for vehicles that conscionable the U.S.-Mexico-Canada Agreement's determination contented requirements to beryllium exempted from the tariffs.

Even earlier Trump's tariffs announcement, U.S. information connected Monday showed mill gross prices jumped to a astir three-year high, suggesting that a caller question of tariffs could soon undercut production.

Trump's confirmation that the tariffs would proceed sent fiscal markets reeling with planetary stocks tumbling and safe-haven bonds rallying. Both the Canadian dollar and Mexican peso fell against the greenback.

PILING ON

Trump has maintained a blistering gait of tariff actions since taking bureau successful January, including afloat restored 25% tariffs connected alloy and aluminum imports that instrumentality effect March 12, rescinding anterior exemptions.

Trump's "America First" agenda, aimed astatine redrawing commercialized relationships successful favour of the U.S., is expected to beryllium a centerpiece of his Tuesday nighttime code to a associated league of Congress.

Trump connected Saturday opened a nationalist information probe into imports of lumber and wood products that could effect successful steep tariffs. Canada, already facing 14.5% U.S. tariffs connected softwood lumber, would beryllium deed peculiarly hard.

A week earlier, Trump revived a probe into countries that levy integer services taxes, projected fees of up to $1.5 cardinal connected each Chinese-built vessel entering a U.S. larboard and launched a tariff probe into copper imports.

These adhd to his plans for higher "reciprocal tariffs" to lucifer the levies of different countries and offset their different commercialized barriers, a determination that could deed the European Union hard.

(Reporting by David Lawder and Andrea Shalal; further reporting by David Shepardson successful Washington, David Ljunggren and Ismail Shakil successful Ottawa, Kylie Madry and Ana Isabel Martinez successful Mexico City and Joe Cash successful Beijing; Editing by Sam Holmes and Neil Fullick)