Trade policy: Media: US tariffs against Mexico and Canada came into force

According to the US media, the tariffs for goods from Mexico and Canada announced by US President Donald Trump came into force shortly after midnight (local time). This reported, among other things, “New York Times”, “Wall Street Journal” and the broadcaster CNN. Trump had previously said in Washington that the punitive measures on goods from Canada and Mexico in the amount of 25 percent would apply from Tuesday. “President Donald J. Trump continues with the introduction of tariffs against Canada and Mexico,” said a Montag published by the White House.

There is now a threat of a North American trade war with uncertain consequences for the global economy. Trump’s announcement let the stock markets break in. The Republican also ordered to double the import duties ordered in February to goods from China to 20 percent.

Trump uses tariffs as a means of pressure

According to the “New York Times”, imports from Canada, Mexico and China made up more than 40 percent of all US imports. Trump justifies the tariffs against Mexico and Canada with the fact that the neighboring countries did not have sufficiently against drug trafficking and illegal migration on the common limits. Among other things, Beijing accuses the Republican not to prevent the drug made in China Fentanyl into the USA.

Trump regularly uses customs threats as a negotiation tactic to force concessions in other areas. The Republican had announced various tariffs in the past few weeks – but some of them were suspended again. So it also behaved with the tariffs on goods from Canada and Mexico. At the beginning of February, Trump attended the concessions of the neighbors just a few hours before the threatened punitive tariffs came into force, especially when it comes to border security. For this he pushed the trade restrictions on for at least 30 days.

Canada reacts with counter -tariffs

It remains to be seen whether Canada and Mexico can agree again with Trump to avert the punitive measures quickly. In any case, Germany should also feel a trade war in North America – especially the German auto industry. Almost all manufacturers and many suppliers use Mexico as a cheap production site – and from there also serve the US market. The tariffs against Canada could become a problem for Volkswagen, for example. Because the Wolfsburg are planning a battery cell factory in Ontario, which is to supply the Group’s e-car works in the United States.

Canada’s Prime Minister Justin Trudeau had already announced countermeasures. Kanada wanted to introduce tariffs of 25 percent on US goods from a minute after midnight (6.01 a.m. CET), he had had it in advance. This initially only applies to goods with a total value of $ 30 billion, the statement said. After 21 days, this number will be increased to a total of $ 155 billion.

Counter -duties also from China

Between the USA and China and thus among the two largest economies, there is a new trade conflict like in 2018. In response to announced new US tariffs, China announced counter-tariffs to agricultural products and further measures against US companies. As the Beijing Ministry of Commerce announced, China will raise additional tariffs of 15 percent on chicken, wheat, corn and cotton from the USA from March 10. An additional customs of 10 percent will apply to other agricultural products, including soybeans, pork and beef.

Also announced Beijing to put other US companies on a list of unreliable entities, which threatens restrictions or complete bans for business activities in China.

US President Donald Trump had previously ordered by decree to double the import duties decided in February to goods from China. The penalty taxes that have been in effect since the beginning of February would be increased from 10 percent to 20 percent, it was said in a correspondingly adapted arrangement that the White House published. The Republican justified the measure by the fact that the drug manufactured in China would continue to be smuggled into the USA.

In Trump’s first term, a similar conflict with tariffs between the USA and China had continued to rock itself. Higher US tariffs burden China’s export management because they make Chinese goods more expensive and therefore less competitive on the US market.