Trudeau hits out at ‘dumb’ tariffs as Trump warns of further hikes against Canada

BBC:

Prime Minister Justin Trudeau slammed Donald Trump’s sweeping tariffs on Canada, calling it a “very dumb thing to do” and vowed to conduct a “relentless fight” to protect its economy.

Trump has imposed 25% tariffs on products entering the US from Canada and Mexico, and has increased a levy on goods coming from China.

The Canadian prime minister announced retaliatory tariffs on US exports and warned that a trade war would be costly for both countries.

But Trump pushed even further in a post on Truth Social, saying: “Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!”

Trudeau accused the US president of planning “a total collapse of the Canadian economy because that will make it easier to annex us”.

“That is never going to happen. We will never be the 51st state,” he told reporters on Tuesday.

“This is a time to hit back hard and to demonstrate that a fight with Canada will have no winners.”

He said that Canada’s main goal remains to get the tariffs lifted so that they “don’t last a second longer than necessary”.

Trump said he is protecting US jobs and manufacturing, and trying to prevent illegal migration and drug trafficking. The US president said his goal is to clamp down on the powerful opioid fentanyl; he has variously blamed the other countries for the drug’s arrival in the US.

Responding to the accusations, Trudeau said on Tuesday there was “no justification” for the new tariffs, because less than 1% of the fentanyl intercepted at the US border comes from Canada.

Trudeau’s words were echoed by Mexican President Claudia Sheinbaum, who said there was “no motive, no reason, no justification” for Trump’s move. Speaking on Tuesday, she too vowed to issue her own “tariff and non-tariff measures” – but said further details would be given on Sunday.

Trump’s tariffs are likely to push up prices for consumers in the US and abroad, said John Rogers, an economics professor at American International University.

The items most likely to be affected the soonest are food – the fruits, vegetables and other produce the US imports from Mexico – followed by the large amounts of oil and gas imported from Canada, Prof Rogers said.

“Prices could go up pretty soon”, Prof Rogers warned, though he was reluctant to say by exactly how much or how quickly.

“We are in pretty uncharted territory,” he told the BBC.

The bigger concern for prof Rogers was the potential damage he said was being done to America’s longstanding trade partners.

“This is kind of sticking your finger in the eye of your neighbour,” he said, adding that, in a potential US-Canada-Mexico trade war, “everybody is a loser”.

The three countries targeted are America’s top trading partners, and the tit-for-tat measures also prompted fears of that very trade war.

“There’s no way you can win a trade war. Everybody suffers, because everybody’s just going to wind up paying higher prices and sacrificing quality,” Prof Rogers said.

Tariffs are a tax on imports from other countries, designed to protect against cheaper competition from elsewhere, and boost businesses and jobs at home.