Global stock markets experienced a decline after President Donald Trump implemented tariffs on goods entering the US from China, Canada, and Mexico. Trump imposed 25% tariffs on imports from Canada and Mexico, and 20% tariffs on imports from China. In response, Canada and China introduced their own import taxes on US goods, while Mexico stated that it had “contingency plans,” raising concerns of an escalating trade war. Consequently, major stock market indexes in the US plummeted, as did the FTSE 100 index in the UK and Asian stock markets.

Analysts have warned that these tariffs could lead to increased prices for US households, as well as have a negative impact on consumers worldwide, including in the UK. Trump justified the tariffs as a response to the alleged flow of illicit drugs and immigrants into the US. However, Canadian Prime Minister Justin Trudeau countered that Canada was responsible for less than 1% of fentanyl entering the US and announced retaliatory tariffs on US goods worth $150 billion. China also implemented countermeasures, including tariffs on various US agricultural products. Mexico is expected to announce its response soon.

Andrew Wilson, from the International Chamber of Commerce, described this as the largest increase in US tariffs since the 1940s, posing significant economic risks. Yale University estimates that these measures could result in losses of approximately $2,000 for US households in the current year alone. Ella Hoxha, head of fixed income at Newton Investment Management, stated that consumers could experience price increases in the short term as companies pass on the costs of tariffs. Chris Torrens, vice president of the British Chamber of Commerce in China, emphasized that the situation presents both challenges and opportunities for British businesses in light of the US-Europe transatlantic alliance’s potential dismantling and the possibility of a stronger UK-China relationship.

Source: https://www.bbc.com/news/articles/ckg1jxdpq0qo