US President Donald Trump's tariffs on products from Canada, China, and Mexico, the US's top three trading partners, have triggered a trade war with significant repercussions for all involved. The tariffs, which range from 10 to 25 percent, are unprecedented in their scope and impact. Economists predict that Mexico, the US's closest trading partner, will be hit hardest, with potential inflation of 6 percent and a 7 percent weakening of its currency. Canada could also see a decline in GDP. The US economy is also expected to be affected, with increased prices for a wide range of goods. The affected countries are responding with retaliatory tariffs and complaints to the World Trade Organization.
US President Donald Trump speaks to reporters after stepping from Air Force One upon his return to Washington, at Joint Base Andrews in Maryland, US, February 2, 2025. — Reuters picas a first-time user . Exclusively for Malay Mail readers: Use codeWASHINGTON, Feb 3 — The tariffs imposed Saturday by President Donald Trump on products from the US’s three leading trading partners are without recent precedent, sparking a trade war with powerful repercussions for all involved.
For Mexico and Canada, the United States is by far the largest customer — accounting for 77 per cent of Mexican goods exports and 84 per cent of Canada’s, according to the two countries’ statistical agencies. For Canada — and excluding the effects of newly announced counter-tariffs — the US tariffs could cause a 2.7 per cent drop in the GDP this year and 4.3 per cent drop next year, compared to the expected levels absent tariffs, according to chief EY economist Gregory Daco, adding to inflationary pressures.
The Tax Foundation, a think tank generally favourable to lower taxes, estimated Friday that the new tariffs could trim US GDP by 0.4 per cent over the long term and add US$830 in annual costs to each American household this year.How are the affected countries responding?Canada reacted first, announcing 25 per cent tariffs on American products eventually worth C$155 billion . Tariffs on a first tranche of products worth US$30 billion will take effect Tuesday.
TRADE WAR TARIFFS ECONOMICS GLOBAL TRADE WTO
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