Tariffs long threatened by US President Donald Trump on goods from Canada, Mexico and China came into effect today, and retaliatory measures are expected.
The 10 percent tariff that Trump imposed on imports from China has been doubled to 20 percent as of today. China immediately announced additional tariffs on key American agricultural products.
As of midnight, products from Canada and Mexico will now be subject to a 25 percent tariff, while Canadian energy products will have an additional 10 percent tariff.
In response, Canadian Prime Minister Justin Trudeau said his country would impose tariffs on more than $100 billion worth of American goods over the next three weeks.
Mexico did not immediately announce how it would respond, and China has already announced new measures.
The US president's moves are raising fears of higher inflation and a devastating trade war, even though Trump has promised national prosperity and said that import tariffs are the easiest path to it.
Trump was willing to ignore the warnings of mainstream economists and even question public support by believing that tariffs could fix the "ills of the country."
"It's a very powerful weapon that politicians haven't used because they were either dishonest, stupid, or paid off in some other way," Trump said at the White House yesterday, adding that his administration would now use that weapon.
Tariffs on Canada and Mexico were originally set to begin in February, but Trump agreed to a 30-day suspension and room for additional negotiations with America's two largest trading partners.
The stated reason for the tariff increase was to tackle drug trafficking and illegal migration, and both countries said they had made progress on those issues.
But Trump also said the tariffs would only be lowered if the US trade imbalance was reduced, a process that is unlikely to be resolved in the short term, the AP agency writes.
There is a possibility that the tariffs will be applied briefly if the US economy struggles, but there is also a possibility that additional tariffs will be imposed on the European Union and India, as well as tariffs on computer chips, cars and medicines, as Trump has promised, writes the AP agency.
The US president has introduced disturbing unpredictability into the global economy and many people are wondering what he will do next, the agency said.
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