Washington, Feb 1 US President Donald Trump’s first tariff hikes are set to go into effect from Saturday, targeting imports from neighbours Canada and Mexico with 25 per cent and China with 10 per cent.
Sector-wise hikes on computer chips, pharmaceuticals, steel, aluminium, copper, oil and gas imports are slated to follow later in the month.
Trump has targeted Canada and Mexico for failing to stop undocumented migrants from entering the US through their borders in the north and south respectively and China for failure to stanch the flow of fentanyl at origin.
The American President told reporters in the Oval Office on Friday that there was nothing Canada, Mexico and China could do to avoid the tariffs before Saturday. But he has indicated there may be exemptions, especially crude oil and automobiles if they fulfil the conditions of the US-Canada-Mexico Agreement.
“It'll be a tremendous amount of money for our country, a tremendous amount, these are big numbers," Trump told reporters Friday.
"And in addition to that, and you see the power of the tariff, I mean, the tariff is good, and nobody can compete with us because we have by far the biggest piggy bank.”
Canada and Mexico have threatened to retaliate with their own hikes on American imports and that could hurt American businesses. Mexico and Canada are the US's top trading partners.
“If the President does choose to implement any tariffs against Canada, we’re ready with a response. A purposeful, forceful, but reasonable immediate response,” Canada’s outgoing Prime Minister Justin Trudeau said Friday. “We won’t relent until tariffs are removed and, of course, everything is on the table.”
The U.S. auto industry stands to bear the worst of the tariff hikes as components and parts are manufactured in facilities in Canada and Mexico and they cross the border several times, which would add to the cost.
The US also imports a lot of agricultural produce from Mexico such as tomatoes, avocados and berries. Tariff hike could push up their prices. Costlier imports of oil and lumber from Canada could push up prices at the gas pump and construction products.
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