WASHINGTON: US President Donald Trump shut down hopes Monday of an eleventh-hour deal with Canada and Mexico to avert sweeping tariffs, while signing an order to further hike duties on China.
Trump had unveiled and then paused blanket tariffs on imports from major trading partners Canada and Mexico in February, accusing them of failing to stop illegal immigration and drug trafficking.
The halt is due to expire Tuesday, and US stock markets tumbled after Trump told reporters Monday there was “no room left” for both countries to avoid the levies.
The duties stand to impact over $918 billion worth of US imports from both countries.
Trump also inked an order Monday to increase a previously imposed 10 percent tariff on China to 20 percent -- piling atop existing levies on various Chinese goods.
Beijing warned it would take countermeasures against the new levies to safeguard its own interests.
Economists caution that tariffs could raise consumer prices while weighing on growth and employment.
The Tax Foundation estimates that before accounting for foreign retaliation, tariffs on Canada, Mexico and China this time would each cut US economic output by 0.1 percent.
And sweeping duties, particularly on Canada and Mexico, are set to snarl supply chains for key sectors like automobiles and construction materials, risking cost increases to households.
This could complicate Trump's efforts to fulfill his campaign promises of lowering prices for Americans.
On Monday, Trump told reporters that 25 percent tariffs on Canada and Mexico were “all set.” Canadian energy goods face a lower rate.
“What they’ll have to do is build their car plants, frankly, and other things in the United States,“ Trump said.
Former US officials see Trump's tariffs over drugs like fentanyl as a means to tackle socio-economic problems -- while providing legal justifications to move quickly.
Washington is also seeking leverage and to rebalance trade ties, analysts believe.
But using emergency economic powers to impose tariffs on Canada, Mexico and China is a novel move, and could trigger lawsuits.
