- 11:00
In his longest-ever speech before Congress, US President Donald Trump addressed several domestic and foreign issues, calling for the beginning of the “America’s Golden Age” and the strengthening of its sovereignty and independence. He emphasized that the United States “will remain free and independent.”
As he delivered his speech, Trump repeatedly mocked his Democratic opponents and insisted that the tariffs he imposed on various countries would make the US "rich and great again," even if they caused "some disruptions" in the US economy. For Trump, tariffs are not just about protecting American jobs; they are about safeguarding the "spirit of the United States." He also warned that companies manufacturing their products outside the US would have to pay tariffs, which in some cases would be "very high," as part of his effort to end what he considers "unfair trade practices."
Since taking office on January 20, 2025—and even before that—Trump has waged a trade war against US trading partners, starting with China, Canada, and Mexico, and extending to threats against the European Union and other countries. Upon assuming office, Trump quickly followed through on his threats. In early February, he signed an executive order imposing additional tariffs of 25% on imports from Canada and Mexico and 10% on imports from China. Even close US allies like the United Kingdom and the European Union were not spared, as Trump announced that European products would soon be subjected to tariffs as well.
This time, however, the situation is different. Trump's new tariffs impact nearly $1.5 trillion in annual imports. Notably, his move raises tariffs on US imports to their highest levels since 1943, according to the Budget Lab at Yale University. The tariffs will have significant consequences for businesses that rely on global supply chains. Superficially, Trump has expressed a strong preference for using tariffs to boost the economy and support domestic industries while increasing government revenue. However, in reality, these measures are widely seen as a means of pressuring countries into negotiations through economic threats.
A US-China Trade War!
President Trump made it clear: The US will impose reciprocal tariffs on its trade partners starting April 2. This announcement came just days after he signed an executive order increasing tariffs on Chinese imports to 20%, citing Beijing’s failure to combat fentanyl trafficking. This executive order raised tariffs on Chinese imports from 10% to 20%, as Trump had previously pledged.
In response, China quickly imposed additional tariffs of up to 15% on certain US goods and added ten companies to its "unreliable entities" list. This came after an additional 10% tariff on Chinese goods went into effect at midnight last Monday-Tuesday.
China’s new tariffs, set to take effect on March 10, include a 15% tariff on poultry, wheat, corn, cotton, and a 10% tariff on sorghum, soybeans, pork, beef, fruits, vegetables, dairy products, and seafood. China's Ministry of Commerce and Customs Administration also announced export controls on several key minerals—tungsten, tellurium, ruthenium, molybdenum, and ruthenium-related elements—citing national security concerns, according to The Guardian.
Meanwhile, China’s Tariff Commission argued that "the unilateral tariff hikes by the US undermine the multilateral trading system, increase burdens on American businesses and consumers, and erode the foundation of US-China economic and trade cooperation." China is now preparing to file a complaint with the World Trade Organization (WTO) against the latest US tariffs.
Tariffs on Canada and Mexico
In response to Trump's 25% tariff on imports from Mexico and Canada, Canada retaliated by imposing tariffs on $107 billion worth of US goods. The first phase includes a 25% tariff on $20.6 billion in US exports, with the second phase—set to take effect in three weeks—applying the same rate to an additional $86.32 billion in goods, including cars, trucks, steel, and aluminum.
Mexican President Claudia Sheinbaum also announced retaliatory tariffs on US imports, set to be revealed on Sunday. Earlier this week, Trump declared that Mexico and Canada had "no way out" of the tariff increases.
The White House justified the move, stating that Mexico and Canada’s failure to curb drug trafficking and cooperate with US law enforcement posed a threat to national security. This raises questions about the future of the trade agreement Trump negotiated during his first term.
In the past few hours, US Commerce Secretary Howard Lutnick hinted that the Trump administration might introduce measures to ease tariffs on Canadian and Mexican imports—just one day after they took effect. However, he did not specify what these measures might entail and dismissed the possibility of eliminating the tariffs entirely. Instead, he pointed to the existing trade agreement between the US, Mexico, and Canada that was negotiated during Trump's first term.
The United States remains a key trading partner for Canada, China, and Mexico. However, the impact of these tariffs will be disproportionately severe on its North American neighbors. In 2023, the US imported approximately $893 billion worth of goods from Canada and Mexico, primarily machinery, vehicles, oil, and petroleum products. Meanwhile, China is the largest market for US agricultural products, accounting for 17% of total US agricultural exports in 2023.
Top Imports to the US from Canada and Mexico
(Source: US Census Bureau)
|
Goods |
Imports from Canada (Billion USD) |
Imports from Mexico (Billion USD) |
Total (Billion USD) |
|
Machinery & Transport Equipment |
106 |
296 |
402 |
|
Mineral Fuels & Lubricants |
123 |
22 |
145 |
|
Manufactured Goods |
52 |
33 |
85 |
|
Food Products & Live Animals |
34 |
33 |
67 |
|
Chemicals |
34 |
11 |
45 |
|
Other Goods |
29 |
19 |
48 |
|
Raw Materials (excluding fuels) |
14 |
3 |
17 |
|
Beverages & Tobacco |
2 |
12 |
14 |
Top Imports to Mexico from the US
(Source: US Census Bureau)
|
Goods |
Import Value (Billion USD) |
Share of Total Imports (%) |
|
Machinery & Mechanical Appliances |
82.6 |
29.9 |
|
Oils & Minerals |
44.2 |
16.0 |
|
Chemicals, Rubber & Plastics |
43.9 |
15.9 |
|
Agricultural Products |
25.2 |
9.1 |
|
Transport Equipment |
24.0 |
8.7 |
|
Raw Metals (e.g., Iron & Steel) |
22.1 |
8.0 |
|
Wood & Paper |
6.91 |
2.5 |
Top Imports to Canada from the US
(Source: US Census Bureau)
|
Goods |
Import Value (Billion USD) |
Share of Total Imports (%) |
|
Machinery & Mechanical Appliances |
68.2 |
22.2 |
|
Transport Equipment |
52.2 |
17.0 |
|
Chemicals, Rubber & Plastics |
50.3 |
16.4 |
|
Agricultural Products |
29.8 |
9.7 |
|
Transport Equipment |
26.7 |
8.7 |
|
Oils & Minerals |
26.1 |
8.5 |
|
Wood & Paper |
10.1 |
3.3 |
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