Donald Trump has admitted that his tariffs on key trading partners will result in “a little disturbance” – as China stated it is “prepared” for “any type of war” with the US.
The US president made his remarks during an address to Congress, hours after the tariffs came into effect.
Producers in Mexico and Canada have been hit with a 25% tax on exports to the US, while a 20% tariff applies to Chinese imports.
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Donald Trump and Chinese President Xi Jinping. The US president has admitted his tariffs will cause ‘a little disturbance’ – as China responds. Pic: Reuters/AP
Stock markets, which Mr Trump is said to monitor closely, fell on the tariffs news.
Exporters in the affected countries as well as US businesses and economists have raised concerns about the tariffs’ potential to increase prices.
Making imports more expensive could lead to higher prices across the board.
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A cycle of high inflation could lead to higher interest rates for longer in the US, the world’s largest economy, potentially dampening economic activity.
A slowed US economy would have global consequences. Regardless of the impact on the US, there are fears of a global trade war, where countries erect their own trade barriers in the form of tariffs.
The Chinese embassy in the US posted on Twitter: “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight until the end.”
The president, however, said he was “just getting started” after 43 days into his second term.
Both China and Canada have retaliated with their own tariffs against the US.
Starting next week, China will impose its own 15% levy on various agricultural products, including chicken, wheat, corn, and cotton, and an additional 10% on soybeans, pork, beef, fruits, vegetables, and dairy products.
The country has also filed additional complaints against the US with the World Trade Organization (WTO).
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Canada’s Prime Minister Justin Trudeau announced that his country is launching its own WTO challenge and denounced the US tariffs as “a foolish move.”
He also warned that the move by the Trump administration would impact American workplaces and contribute to inflation in the US.
Addressing the American public, he said: “We did not want this… but your government has chosen to do this to you.”
Canada has announced the imposition of 25% tariffs on US imports worth C$30bn (£16.3bn).
However, US commerce secretary Howard Lutnick struck a different tone on tariffs, and on Monday said the president will likely propose a compromise with Canada and Mexico as early as Wednesday, which could adjust tariffs.
