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Business leaders worry about possible recession

By: Kim Hjelmgaard
USA Today

..... Canada and China swiftly announced retaliatory tariffs against the U.S. Tuesday [03/04/2025] shortly after long-threatened levies by the Trump administration on those countries and Mexico took effect.
..... President Donald Trump's new 25% tariffs on imports from Mexico and Canada were imposed at 12:10 AM. EST, along with a doubling of duties on some Chinese goods to 20%.
..... Trump's moves effectively launched new trade conflicts with the U.S.'s top trading partners and threatened to upend two-way annual trade worth nearly $2.2 trillion in 2024, according to data from the Office of the U.S. Trade Representative. The tit-for-tat tariffs rattled global markets and restrained U.S. ones.
..... Trump has accused all three countries of not dewing enough to clamp down on drugs like the opioid fentanyl entering the U.S. He says tariffs will boost U.S. manufacturing and prevent oth4er countries from taking American jobs.
..... Canadian Prime Minister Justin Trudeau said Ottawa would respond with immediate 25% tariffs on $20.7 billion worth of U.S. imports and on another $86.2 billion if Trump's tariffs were still in place in 21 days. he said previously that Canada would target American beer, wine, bourbon, home appliances, and Florida orange juice.
..... "Tariffs will disrupt an incredibly successful trading relationship," Trudeau said, adding that they would violate the US-Mexico-Canada free trade agreement signed by Trump duurign his first term.
..... China immdediatley countered the U.S. duties with 10% to 15% tariffs on some U.S. agricultural product imports.
..... In a news conference in Mexico City, Mexican President Claudia Sheinbaum said there as "no justification" for Trump's tariffs and that they were imposed "despite our work agaisnt gangs and fentanyl." Sheinbaum said she plans to announce Mexico's retaliatory tariffs and other measures against the U.S. on Sunday. [03/09/2025]
..... Tariffs are essentially taxes charged on goods imported from another country. they are typically set at a percentage of the goods value and usually paid by the importer. The extra cost are generally passed on to the consumer.
..... Canada and Mexico have enjoyed a virtually tariff-free trading relationship with the U.S. for three decades.

Doubling China's tariffs

..... The extra 10% duty on Chinese goods adds to a 10% tariff imposed by Trump in February [2025] to punish Beijing over the U.S. fentanyl crisis. The 20% duty comes on top of tariffs of up to 25% imposed by Trump during his first term.
..... Some of these products saw U.S. tariffs increase sharply under former President Joe Biden, including a doubling of duties on Chinese semiconductors to 50% and a quadrupling of tariffs on Chinese electric vehicles to over 100%.
..... The 20% tariff will apply to several major consumer electronics imports from china previously untouched by duties, including smartphone, laptops, video game consoles, smartwatches, speakers and Bluetooth devices.
..... China's commerce ministry on Tuesday [03/04/2025] said its now levies, which take effect march 10, [2025] include a 15% tariff on chicken, wheat, corn and cotton, and a 10% tariff on soybeans, pork, beef , fruits and dairy and fish products.
..... "The unilateral tariff increase by the U.S. harms the multilateral trade system, increase the burden on American business and consumers, and undermines the foundation of China-U.S. economic and trade cooperation," China's Customs Tariff Commission said in a statement.
..... Beijing also filed a lawsuit with the World Trade Organizational over the new tariffs, as it did in response to the previous 1% tariff the Trump administration imposed on Chinese goods.

Recession fears

..... Some business leaders said the tariffs on Mexican and Canadian products could have deep repercussions for a highly integrated North American economy that depends on cross-border shipments to build cars and machinery, refine energy and process agricultural goods.
..... "Today's [03/04/2025] reckless decision by the U.S. administration is forcing Canada and the U.S. toward recession, job losses and economic disaster," Canadian Chamber of Commerce CEO Candace Laing said in a statement.
..... She said the U.S. tariffs will fail to under in a "golden age" coveted by Trump and producers and disrupt supply chains.
..... "Tariffs are a tax on the American people," Laing said.
..... Even before Trump's tariffs announcement, U.S. data on Monday [03/03/2025] showed factory gate prices jumped to a nearly three-year high, indicating the new wave of tariffs could potentially soon undercut production. Factory gate prices reflect the prices of goods or services before any taxes, shipping or other fees are added.
..... Economists at Capital Economics, a financial consultancy, wrote in investor notes Tuesday [03/04/2025] tat if the U.S. tariffs remain in place, they risk plunging Canada and Mexico into recession and slowing global growth more generally.

Tariff actions at a blistering pace

..... Trump has maintained a blistering pace of tariff actions since taking office in January, [2025] including fully restoring 25% tariffs on steel and aluminum imports that take effect March 12, [2025] revoking prior exemptions.
..... Trump's "America First" agenda, aimed at redrawing trade relationships in favor of the U.S. was expected to be a centerpiece of his Tuesday [03/04/2025] night address to a joint session of Congress.
..... Trump on Saturday [03/01/2025] opened a national security investigation into imports of lumber and wood products that could result in steep tariffs. Canada, already facing 14.5% U.S. tariffs on softwood lumber, would be hit particularly hard.
..... A week earlier, Trump revived a probe into countries that levy digital services taxes, proposed fees of up to $1.5 million on every Chinese-built ship entering a U.S. port, and launched a tariff investigation into copper imports.
..... These add to his plans for higher "reciprocal tariffs" to match the levies of other countries and offset their other trade barriers, a move that could hit the European union economic bloc.

..... Contributing: Reuters

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