Donald Trump imposes tariffs on Canada, Mexico and China, raising prospect of inflation and trade conflict

US President Donald Trump on Saturday signed an order to impose stiff tariffs on imports from Mexico Canada and China fulfilling one of his postcampaign commitments to voters that also carries the risk of sparking higher inflation and disrupting businesses across North AmericaTrumps order also includes a mechanism to escalate the rates if the countries retaliate against the US as they are possibly prepared to do The decision throws the global economy and Trumps own political mandate to combat inflation into possible turmoil though the Republican president posted on social media that it was necessary to protect AmericansThe tariffs risk an economic standoff with Americas two largest trading partners in Mexico and Canada upending a decadesold trade relationship with the possibility of harsh reprisals by those two nations The tariffs also if sustained could cause inflation to significantly worsen possibly eroding voters trust that Trump could as promised lower the prices of groceries gasoline housing autos and other goodsTrump declared an economic emergency in order to place duties of 10 per cent on all imports from China and 25 per cent on imports from Mexico and Canada But energy imported from Canada including oil natural gas and electricity would be taxed at a 10 per cent rateThe tariffs would go into effect on Tuesday setting a showdown in North America that could potentially sabotage economic growth A new analysis by the Budget Lab at Yale laid out the possible damage to the US economy saying the average US household would lose the equivalent of USD 1170 in income from the taxes Economic growth would slow and inflation would worsen and the situation could be worse if Canada Mexico and China retaliateFor the moment Mexico plans to stay coolheaded as it weighs its options Mexico President Claudia Sheinbaum appearing Saturday at an event promoting a government housing program outside Mexico City said Im calm Ive been saying since yesterday because I know that Mexicos economy is very powerful very strongA senior administration official insisting on anonymity to brief reporters said the lower rate on energy reflected a desire to minimize any disruptive increases on the price of gasoline or utilities Thats a sign White House officials understand the gamble theyre taking on inflation Price spikes under former President Joe Biden led to voter frustration that helped to return Trump to the White House last yearThe order signed by Trump contained no mechanism for granting exceptions the official said a possible blow to homebuilders who rely on Canadian lumber as well as farmers automakers and other industriesThe Trump administration put the tariffs in place to force the three countries to stop the spread and manufacturing of fentanyl in addition to pressuring Canada and Mexico to limit any illegal immigration into the United StatesThe official did not provide specific benchmarks that could be met to lift the new tariffs saying only that the best measure would be fewer Americans dying from fentanyl addictionThe order would also allow for tariffs on Canadian imports of less than 800 Imports below that sum are currently able to cross into the United States without customs and dutiesIt doesnt make much economic sense said William Reinsch senior adviser at the Center for Strategic and International Studies and a former US trade official Historically most of our tariffs on raw materials have been low because we want to get cheaper materials so our manufacturers will be competitive Now whats he talking about Hes talking about tariffs on raw materials I dont get the economics of itThe Republican president is making a major political bet that his actions will not significantly worsen inflation cause financial aftershocks that could destabilize the worldwide economy or provoke a voter backlash AP VoteCast an extensive survey of the electorate in last years election found that the US was split on support for tariffsThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever