Trump quickly threatened further escalation,while referring to the Canadian prime minister as a provincial leader,posting on his Truth Social:“Please explain to Governor Trudeau of Canada that when he puts on a Retaliatory Tariff on the US,our Reciprocal Tariff will immediately increase by a like amount!”
Trump and Trudeau talk prior to a NATO round table meeting in the UK in 2019.Credit:AP
The tariffs that took effect on Tuesday include a 25 per cent levy on all imports from Mexico and anadditional 10 per cent tax on Chinese products,taking the total to 20 per cent.
Doug Ford,the premier of Canada’s largest province Ontario,said he would immediately tear up Ontario’s contract withElon Musk’s Starlink satellite communications service,take all American alcohol products off the shelves and ban US companies from winning government contracts.
Ford also said that if a trade war “persists” he could tax electricity generated in Ontario flowing into the US states of New York,Michigan and Minnesota.
Justin Wolfers,an Australian economist and professor at the University of Michigan,said the tariffs were bound to push up prices for American consumers.
“You can’t suspend the laws of economics,” he told MSNBC. “If Home Depot has to pay more to import a washing machine you might want to buy,it passes on those higher costs.”
The fresh round of tariffs was announced at the start of February but paused for a month after Canada and Mexico agreed to further measures on their respective borders to combat fentanyl trafficking and illegal immigration.
Some of those initiatives had already been agreed under the Biden administration.
Trump has declared national emergencies on immigration and fentanyl and uses that as the legal justification for tariffs.
Trudeau said it was now clear “as many of us suspected” that the tariffs were not really about fentanyl,nor were they a “clever negotiating ploy”,as he had hoped.
Ontario Premier Doug Ford is ripping up his province’s contract with Starlink.Credit:AP
“Even the excuse that he’s giving for these tariffs today of fentanyl is completely bogus,completely unjustified,completely false.
“So we actually have to fall back on the one thing he has said repeatedly,that what he wants is to see a total collapse of the Canadian economy because that will make it easier to annex us.
“That would never happen,” Trudeau added.
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Trump will make a major State of the Union-style address to Congress on Tuesday night (Wednesday AEDT) in which he will recap his claims of achievements from his eventful first six weeks back in office and lay out plans for the months and years ahead.
The next round of US tariffs is 25 per cent duties on steel and aluminium,due to start on March 12,which would affect hundreds of millions of dollars in Australian exports.
Trump has said he would consider an exemption for Australia because it is one of the few countries with which the US runs a trade surplus.