With the imposition of 25% tariffs on Canada and Mexico and 39% on China, swift retaliatory tariffs announced in response

Kathmandu, March 4 : U.S. President Donald Trump’s new tariffs, effective from March 4, mark the pinnacle of his actions to date. The United States has targeted its three major trading partners. The direct taxes imposed on Canada, Mexico, and China are poised to destabilize global markets.

Trump has done what he said he would—bringing his words to action. For a long time, President Donald Trump has been threatening to impose heavy tariffs on Canada and Mexico, two of America’s major trading partners. Last month, when he first announced the tariffs, he gave both countries a last-minute reprieve. But this time, he was not in a mood to soften his stance. The new tariffs went into effect at 12:01 a.m. on March 4. The U.S. imposed a 25% tariff on most goods imported from its two neighboring countries, and an additional 10% tariff on Chinese goods. Starting last month, a 10% tariff was already in place, which has now been doubled to 20%. During his first term, tariffs of nearly 65% on some Chinese goods had created tension.

China, in response, has announced tariffs on various U.S. goods. As soon as President Trump announced tariffs on Canada, Mexico, and China, Beijing and Ottawa declared immediate retaliation, heightening investor concerns about the global economy. The escalating trade war has added to global uncertainty, further shaken by the Trump administration’s decision to suspend military aid to Ukraine.

China’s Ministry of Finance announced a 15% tariff on imports of chicken, wheat, corn, and cotton from the United States, and a 10% tariff on imports of sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products.

Canada imposed a 25% tariff on $30 billion worth of American goods, though it did not specify which products would be affected. Canadian Prime Minister Justin Trudeau stated in a statement that the tariffs would extend to $125 billion of American goods in 21 days.

Trump has often shown a particular fondness for tariffs. He has claimed that tariffs would strengthen the U.S. economy by generating revenue for the government. He has considered imposing tariffs on everything from cars to semiconductors, targeting both friends and alleged adversaries. However, many investors and business owners, who thought his protectionist rhetoric would result in more noise than action, were shocked this time. Many believed he would back down again, especially in the case of northern Mexico and Canada. Within seconds of Trump announcing the tariffs, stock markets plummeted. The S&P 500 index of major U.S. companies fell by about 2% by the end of the day, marking the year’s largest decline.

If he remains steadfast in his tariff policy, the tariffs on Canada and Mexico will be the most extreme and dangerous protectionist step taken by a U.S. president in nearly a century. Trump’s move is said to push the trilateral trade relationship between the U.S., Canada, and Mexico to a terrifying brink, sparking widespread concern in America. North American trade and partnerships were considered one of the world’s most successful examples of economic integration. Particularly in the auto industry, the three countries operated as branches of the same company. The Financial Times noted that some vehicle parts cross the U.S. border seven times before final assembly. Trade representatives warn that these parts will now incur tariffs each time they cross the border. This could increase costs, potentially forcing some firms to halt production. In Trump’s simplistic view, tariffs would encourage automakers to establish or relocate plants in the U.S. In reality, these barriers could disrupt supply chains, raise costs for consumers, and lead to widespread inflation for the average American consumer. According to The Economist, the average car price in the U.S. could rise by about $2,500.

Canada and Mexico had already warned that they would impose their own tariffs on U.S. products. Canada has already announced parallel tariffs similar to those of the U.S. Ottawa’s prime minister warned of cutting off electricity exports to U.S. states. This tit-for-tat retaliation has severely shaken the North American market. Trump posted on his social media platform Truth Social: “American farmers should be ready to start producing more agricultural products for sale within the United States.” According to Trump’s directive, replacing Mexican avocados with domestically grown corn and wheat for export could pose a significant challenge for American farmers.

China’s retaliation includes imposing tariffs on U.S. food imports and halting the sale of Chinese goods to 15 American companies. China, the top overseas market for American farmers, will now have a significant impact on prices and demand in the Midwest commodities markets.

Trump believes the tariffs on Canada, China, and Mexico will generate more than $100 billion annually for the federal government. According to the Tax Foundation, a think tank, additional tax collection could increase by more than 2%. Mexico and Canada are major U.S. importers of products ranging from spring beans to tomatoes, cars to crude oil. The prices of these products, and many others, are likely to rise in the coming months.

The U.S. move to step out of the regional production networks developed over more than three decades of free trade has dealt a deep blow to its partners. These three countries, with a combined market of 500 million people, shared market values. Canada has vast mineral resources; Mexico’s combination of cheap labor and American technological expertise propelled this continent forward. Now, it is fractured.

The tariffs on U.S. neighbors are highly unusual. Trump’s new additional tariffs on China have attracted relatively little media attention. According to the Peterson Institute for International Economics, a think tank, during his first term, years of disputes and phased negotiations with China resulted in an average tariff of 19% on its rival.

Just two months into his new term, Trump has added a 20% tariff on all imports from China. The new tariffs, particularly targeting products like computers, toys, and smartphones, were noted by the Wall Street Journal. While Trump appeared to try to shield consumers from price increases caused by additional tariffs during his first term, this time he is firmly marching down a ruthless path. The tariffs on China, which the Biden administration continued since 2021, have now been increased to 39% with this latest addition.

Trump’s tariffs during his first term were implemented against the backdrop of strong economic growth driven by tax cuts, when he signed tax increase laws. Surveys show consumers are increasingly concerned about the resurgence of inflation due to tariffs. Uncertainty will certainly discourage businesses from investing. Public finances are becoming increasingly strained daily, leaving little room for another major tax cut. This suggests the U.S. economy is facing a major shock, while Trump’s trade war declaration looms globally. It’s another matter that, while people work to stop wars involving bullets, bombs, and rocket attacks that kill, Trump’s trade war could create a terrifying crisis of hunger, scarcity, and unemployment.