US President Donald Trump is imposing 25% duties on Saturday on Saturday on Saturday, 25% in Canada and 10% on China, the White House announced on Friday.
However, Trump said yesterday that Canadian oil would be tailored to 10%, and this could come into force later on February 18th.
The US president also said he plans to impose duties on the European Union in the future, saying the block was not done well in the US.
White House spokesman Karoline Leavitt said the tariffs in Canada and Mexico came in response to “illegal fentanyl they supplied and allowed to move to our country, which has killed tens of millions of Americans”.
Trump has also repeatedly stated that this move aims to deal with the large number of immigrants without documents that have crossed the US border as well as commercial deficits with their neighbors.
Leavitt said at a press conference at the White House on Friday: “These are promises that have been made and promises kept by the president.”
During the election campaign, Trump threatened to hit Chinese construction products with up to 60%, but excluded any immediate action on the first day of his return to the White House, ordering his government to study the matter.
Imports of US products from China have been dramatically reduced since 2018, which economists have partially attributed to a series of escalating duties imposed by Trump during his first term.
Earlier this month, a leading Chinese official warned that his country would respond to protectionism as Trump’s return to the presidency renews the threat of a trade war between the world’s two largest economies – but did not name the US.
Addressing the World Economic Forum in Davos, Switzerland, Ding Xuexiang, Vice President of China, said his country is looking for a “win-win” solution for commercial tensions and wants to expand its imports.
China, Canada and Mexico are the top US trading partners, representing 40% of the goods imported into the US last year, and fears that new duties could start a major trade war and increase prices of many products.
Canadian Prime Minister Justin Trinto said on Friday: “It’s not what we want, but if it goes, we will also act.”
Canada and Mexico have already stated that they will respond to US duties by their own measures, while also seeking to assure Washington that they are taking action to deal with concerns about their US borders.
If US imports of oil from Canada and Mexico are hit with duties, Trump’s promise will reduce the cost of living for American citizens.
Duties are an introductory tax on goods produced abroad. Theoretically, taxing products coming in a country means that people are less likely to buy them as they become more expensive. The intention is to buy cheaper local products – boosting a country’s economy.
However, the cost of tariffs on imported energy could be passed on to businesses and consumers, which can increase prices of everyone, from gasoline to grocery stores.
About 40% of the crude processed by US oil refineries is imported and its overwhelming majority comes from Canada.
On Friday, Trump has agreed the cost of duties sometimes to be passed on to consumers and that his plans can cause disruption in the short term.
Mark Carney, a former head of the central banks of Canada and England, told the BBC on Friday that duties would hit economic growth and increase inflation.
“They will harm the reputation of the US all over the world,” said Carney, who is also a candidate to replace Prime Minister Trindo as the leader of the Canada liberal party.
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