Tensions are rising as tariffs are being imposed. (freepik)
The United States has recently imposed tariffs on imports from Canada and China, causing a rise in trade tensions as well as prompting both countries to put forth retaliatory measures.
The new tariffs implemented by the United States include a 25% duty on steel and aluminum and a 20% tariff on Chinese goods, and are intended to take effect in March.
The introduction of this decision sparked many strong reactions across all countries involved, leading to Canada and China moving quickly, implementing countermeasures of their own that aimed to protect their own economies from the impact of the new U.S. trade policies.
Canada has been one of the United States’ closest trading partners, with a formal free trade agreement being signed circa 1988. Because of this, Canada was among those that were most affected by the new tariffs.
In response, the Canadian government announced their own 25% tariff on American steel, aluminum, and other consumer goods. Soon after, Canada added more tariffs, which targeted roughly $20.6 billion worth of U.S. products, affecting a wider scope of imports, such as industrial materials and manufactured goods.
Along with these tariffs, Canadian leaders criticized the U.S. for harming both countries’ economies, arguing that the tariffs weaken their long standing relationship as trading partners.
Similarly, China also had a swift and forceful response to these imposing tariffs. The Chinese government was quick to impose tariffs on key American exports, including agricultural products, automobiles, and technology products.
These recently implemented countermeasures are expected to largely affect U.S. farmers and manufacturers due to China having been a major buyer of U.S. agriculture.
Chinese officials have spoken out, criticizing the U.S.’s tariffs as violating international trade agreements, stating they would not tolerate economic coercion.
China has continued to hint at putting forth further restrictions on American businesses that are currently positioned in their country.
Some analysts have theorized that China could even limit U.S. access to critical materials used in technology companies, implying significant effects for American companies that rely so heavily on Chinese suppliers.
In response to these rising trade tensions, investors and economic analysts have expressed their worry, leading to fluctuations in the stock market.
Furthermore, businesses have begun to rethink their management, in preparation for any possible long term disruptions in suppliers.
While leaders of all three countries involved have expressed openness to talking through these trade issues, the future of trade relationships remain uncertain.
The U.S. government has argued that the tariffs are meant to protect American industries and encourage the further production of American products, fixing trade imbalances.
Despite this, critics have warned that these policies would instead harm U.S. businesses, particularly those that rely on international trade, as well as possibly damage relationships with key allies of the country.
As this situation continues to develop, citizens, companies, and government officials will continue to watch the progression in possible negotiations. It continues to remain unclear how these tariffs could affect the future of the U.S. economy and the country’s international relationships.