Trump Warns Americans May Experience ‘Pain’ Due to Trade War with Mexico, Canada, and China
US President Donald Trump indicated that the extensive tariffs he has implemented on Mexico, Canada, and China might lead to “some pain” for Americans, as global markets exhibited concerns that these levies could hinder growth and reignite inflation.
Mr. Trump mentioned that he would engage in discussions with the leaders of Canada and Mexico, who have already announced their own retaliatory tariffs, but he played down expectations that they would persuade him to change his stance.
“I don’t expect anything dramatic,” Mr. Trump told reporters upon returning to Washington from his Mar-a-Lago estate in Florida.
“They owe us a lot of money, and I’m sure they’re going to pay.”
Mr. Trump defended the tariffs as essential measures to combat illegal immigration and the drug trade.
Critics argue that the Republicans’ plan to impose 25% tariffs on Canada and Mexico and 10% tariffs on China will hinder global growth and increase prices for Americans.
According to Mr. Trump, these tariffs are necessary to address immigration issues and narcotics trafficking while stimulating domestic industries.
“We may have short-term, some little pain, and people understand that. But long term, the United States has been ripped off by virtually every country in the world,” he stated.
The reaction from financial markets was negative, with U.S. stock futures falling in early Asian trading; Nasdaq futures NQc1 dropped by 2.35%, and S&P 500 futures EScv1 fell by 1.8%.
US oil prices surged by over $2, while gasoline futures soared more than 3%.
North American companies prepared for new duties that could disrupt industries ranging from automotive to consumer goods and energy.
Mr. Trump has committed to maintaining these tariffs until he deems the national emergency regarding fentanyl, a dangerous opioid, and illegal immigration to the United States is resolved.
Mr. Trump’s tariffs are set to encompass nearly half of all US imports, which would require the United States to more than double its own manufacturing output to fill the gap—a task deemed infeasible in the short term by ING analysts.
“Economically speaking, escalating trade tensions are a lose-lose situation for all countries involved,” the analysts remarked in a note.
Other analysts cautioned that the tariffs could potentially push Canada and Mexico into recession and bring about “stagflation”—characterized by high inflation, stagnant economic growth, and increased unemployment—domestically.
Deadline
The tariffs, outlined in three executive orders, are expected to take effect at 5 am Irish time on Wednesday.
Markets awaited developments with trepidation, though some analysts expressed cautious optimism for negotiations, particularly with Canada and China.
“The tariffs appear likely to be implemented, although a last-minute compromise cannot be entirely dismissed,” Goldman Sachs economists noted.
They indicated that the levies are likely to be temporary, but the outlook remains uncertain as the White House established very vague conditions for their removal.
Mr. Trump has pledged to maintain the tariffs until he considers the national emergency over fentanyl and illegal immigration resolved.
Shipping containers at the Port of Montreal in Montreal
China has left the possibility open for talks with the United States.
The most significant pushback centers around fentanyl.
“Fentanyl is America’s problem,” stated China’s foreign ministry, claiming that China has implemented extensive measures to tackle the issue.
Mexican President Claudia Sheinbaum, raising her fist in the air during a speech outside the capital, pledged resilience.
She accused the United States of failing to address its fentanyl problem, asserting that tariffs would not resolve the issue.
Mexican President Claudia Sheinbaum ordered retaliatory tariffs in response to the US decision.
Canada announced it would pursue legal action through relevant international bodies to contest the tariffs.
Prime Minister Justin Trudeau also encouraged Canadians to boycott products from their longtime ally after implementing retaliatory tariffs on $155 billion worth of US goods, ranging from peanut butter and beer to lumber and appliances.
Canadian officials stated they are preparing measures to assist businesses that could be negatively impacted by the trade war.
Mr. Trump has expressed disdain towards Canada, even suggesting that the country should become the 51st US state.
Following through
The tariff announcement fulfilled Mr. Trump’s repeated threats during his 2024 campaign, disregarding warnings from economists that a trade war would damage growth and increase costs for consumers and businesses.
Mr. Trump declared a national emergency under two laws—the International Emergency Economic Powers Act and the National Emergencies Act—which grant the president extensive powers to impose sanctions in response to crises.
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Trade lawyers indicated that Mr. Trump may face legal challenges for pushing the boundaries of US laws.
A Reuters/Ipsos poll released last week revealed that Americans are divided on tariffs, with 54% opposing new duties on imported goods and 43% supporting them, with Democrats largely opposed and Republicans more in favor.
