As of today, new US tariffs against China, Canada and Mexico have apply. All three countries announced countermeasures. The concern is growing before a trade war worldwide. Germany warned of a customs spiral where there are no winners.
US President Donald Trump made his threat true and imported from the neighboring countries of Canada and Mexico with high tariffs. As of today, 25 percent surcharge is due to deliveries from free trade partners to the United States, with Canadian oil and gas it is ten percent.
Trump also doubled from ten to 20 percent. Beijing and Ottawa immediately reacted with countermeasures. The stock markets in Europe, the USA and Asia dropped in the face of the escalation.
Canada also raises high tariffs
Canada, Mexico and China are the three most important trading partners in the United States. The value chains in particular of the three North American countries are closely interwoven due to their free trade agreement. The US tariffs are worth $ 918 billion. “Nothing justifies this measure,” criticized Canada’s Prime Minister Justin Trudeau.
Shortly before the US tariffs come into force, he announced that his country would also raise tariffs of 25 percent on goods from the United States. He put the person concerned at $ 155 billion Canadian dollars – around 102 billion euros.
“If the US tariffs are not set, we have active and ongoing discussions with provinces and territories to take several non-tariffs,” said Trudeau. This could presumably mean a restriction or even the stop of oil exports to the USA – a measure that would hit the United States hard.
Mexico also plans non -tariff measures
Mexico also reacted with counter -tariffs and other measures. “We decided to react with tariffs and non -tariff measures,” said head of state Claudia Sheinbaum. She will inform you more about next Sunday. Non-collective bargaining measures could be, for example, import restrictions or regulations for US companies.
Sheinbaum practiced sharp criticism of the USA. “We emphasize that there is no motive, no reason and no justification for this decision.” Trump’s customs policy will “have an impact on our peoples and nations”.
China raises tariffs agricultural US products
China reacted to a number of agricultural products from the USA with tariffs of ten to 15 percent. Washington undermines the “multilateral system of world trade”, explained the Ministry of Finance in Beijing. The Ministry of Foreign Affairs was combative: China would fight “until the bitter end”, said a spokesman.
Also announced Beijing to put other US companies on a list of unreliable units, which threatens restrictions or complete bans for business activities in China. In addition, China complained about the United States by means of the dispute mechanism of the World Trade Organization (WTO).
However, analysts rated the Chinese reaction as reserved. According to Pinpoint Asset Management, the counter tariffs only affect 14 percent of all US products imported to China. Beijing seems to shy away from an escalation, explained the Pinpoint analyst Zhiwei Wang.
Trump is particularly aimed at the EU
Trump threatened with further surcharges, including tariffs on introduced agricultural products from April 2. It is still unclear how high they should be and whether all agricultural products and all export states should be affected. He appealed to the US agriculture to set up its production for the domestic market.
Around April 2, according to a previous announcement by Trump, the so-called reciprocal US tariffs should come into force. These are customized to the individual states that correspond to the tariffs and other loads that apply to the same products from the United States in the respective state.
Trump is particularly aimed at the EU. The US President had already threatened to do tariffs against the European car industry. You could grab from April. The EU Commission responsible for trade policy described the tariffs against Canada and Mexico as a threat to the “stability of the economy on both sides of the Atlantic”. This creates world trade and unnecessarily created uncertainty.
Sharp criticism from Germany
Federal Minister of Economics Robert Habeck criticized the United States unusually: “We are running sighted eye into a comprehensive customs conflict.” The US tariffs are unfounded, according to the Greens politician. “This is the customs spiral that I have warned of Washington since the first announcements.”
There are no winners in such a trade war. “The result is more unrest in the markets, more inflation, higher prices, less investment security,” he added.
Customs against EU would hit Germany hard
Initially, the polled Germany only affects indirectly. However, the announced steel and aluminum tariffs and other payments already threatened by Trump could make the local industry hard.
For the German automotive industry, the higher tariffs on imports from Mexico are particularly harmful because it often has production locations in Mexico, said economist Samina Sultan from the Institute of German Economy (IW) Cologne. “Cars and auto parts sometimes cross the limits several times before they are completed. These supply chains are in question through the customs increases.”
The Association of the VDA automotive industry sees a significant burden and negative consequences for consumers – especially in North America. For Germany and Europe, the VDA fears effects on the local jobs if companies have to operate the markets for protectionism and increasing geopolitical tensions more and more.
Trade conflict Exchange stocks
The uncertainty already caused course slumps in the stock exchanges in the USA, Europe and Asia. “The stock exchanges have been politically driven as long,” commented analyst Thomas Altmann from QC Partners in Frankfurt am Main. “And with the dominance of political issues, volatility increases.”
The question is “whether Trump does not open too many fronts at once and whether the US economy can cope with everything,” said Commerzbank analyst Michael Pfister.
The German leading index had reached a record high of more than 23,000 points on Monday – however, disillusionment returned after the customs news from overseas. In the early German trade, the DAX sagged again. The EuroStoxx 50 euro zone guide barometer also gave in on Tuesday.
Trump justifies Zölle against neighboring countries and China with their lack of use against drug smuggling. However, a leading UN expert doubted the benefits of such measures. “Common sense would say that smugglers always find a loophole, no matter what is imposed,” said Jallal Toufiq, President of the UN drug control council Incb, in Vienna. Tologne targeted normal trade, and not on the illegal black market.
