Tue Feb 04 19:31:16 IST 2025: ## Trump’s New Tariffs Spark Trade War Fears

**Washington D.C.** – President Donald Trump’s announcement of new tariffs on goods from Canada, Mexico, and China has sent shockwaves through global markets. While a 25% tariff on Canadian and Mexican imports has been temporarily postponed following eleventh-hour negotiations with Prime Ministers Justin Trudeau and Claudia Sheinbaum, a 10% tariff on Chinese goods went into effect Tuesday, triggering immediate retaliatory measures from Beijing.

The US, the world’s second-largest goods trader, has seen trade with Mexico, Canada, and China account for over 40% of its total goods trade, exceeding $2 trillion. The new tariffs are expected to significantly impact the prices of various goods, including cars, fuel, computers, electronics, and agricultural products like avocados.

Trudeau and Sheinbaum agreed to enhanced border security measures to combat drug and migrant trafficking in exchange for the temporary tariff reprieve. Trudeau also announced Canada’s commitment to a $1.3 billion border security plan, the appointment of a “fentanyl czar,” and the designation of cartels as terrorist organizations.

Experts warn that the situation could escalate into a full-blown trade war. Vina Nadjibulla of the Asia Pacific Foundation of Canada expressed concern, stating that while the tariff pause is positive, Canada needs to diversify its trade relationships beyond its over-reliance on the US. She also highlighted the inflationary pressures and supply chain disruptions that are likely to result from the tariffs.

The Peterson Institute for International Economics predicts that machinery, electronics, toys, and sporting goods will be among the hardest hit by the tariffs on Chinese imports. Consumers are expected to bear a significant portion of the cost through higher prices, while businesses, particularly in the auto sector, will also face considerable challenges. While the administration hopes the tariffs will stimulate domestic manufacturing and job creation, the long-term economic consequences remain uncertain. The retaliatory tariffs announced by Canada and China are likely to further complicate the situation. The WTO is expected to play a role in resolving potential disputes arising from the trade war.

Read More