As President Trump has announced his plan to "respond" to the retaliatory measures of the other country, a vicious cycle of retaliating again against the other country is expected. In addition, tariffs on steel and aluminum (March 12) and mutual tariffs (April 2) are scheduled one after another. On top of that, President Trump is also adding items subject to tariffs "out of the blue."
Initially, President Trump announced that he would apply 25% tariffs to Canada and Mexico from the 4th of last month and impose an additional 10% point of tariffs on China. However, when Canada and Mexico agreed to cooperate in strengthening border security to crack down on illegal immigrants and drugs, President Trump suspended the imposition of 25% tariffs on the two countries for one month. On the 4th of last month, an additional 10 percentage points of tariffs were imposed on China.
Canada, Mexico, and China, the three largest trading partners of the United States, account for more than 45% ($3 trillion) of all U.S. imported products (value) as of 2022. Under the US-Mexico-Canada Agreement (USMCA), the "triangular trade" between the US, Canada and Mexico, which was mostly tariff-free, is expected to stop working. The Wall Street Journal (WSJ) diagnosed, "With President Trump's decision to impose 25% tariffs on both countries, the two economies are facing stress tests comparable to the global financial crisis and pandemic."
The 'vicious cycle of retaliation' has opened up. Canada has decided to impose retaliatory tariffs on U.S. imports. According to Reuters, Canadian Prime Minister Justin Trudeau said in a statement on the 3rd that Canada will also impose 25% retaliatory tariffs on US imports worth C$30 billion (about 30 trillion won) from the 4th when US tariffs take effect. He also stressed that an additional retaliation tariff worth C$125 billion (about 125 trillion won) will be applied within 21 days. Mexico, which has already prepared a scenario-specific plan, is also considering countermeasures. Mexican President Claudia Sheinbaum said, "We have prepared a plan to prepare for any case from Plan A to D."
The front lines of the tariff war are expected to expand further. On the 26th of last month, President Trump announced a plan to impose 25% tariffs on European Union (EU) products. It also announced the imposition of tariffs on each item and mutual tariffs one after another. Mutual tariffs are subject to virtually all countries in the world, and tariffs are imposed in consideration of the other country's tariffs as well as non-tariff barriers. In particular, many controversies are likely to arise in the process of "denializing" non-tariff barriers. On this day, President Trump said on his SNS Truth Social that "Tariffs will be imposed on foreign agricultural products from April 2nd." Following the policy of imposing tariffs on wood and copper, the number of items targeted has increased again in just a few days. Among them, President Trump is showing inconsistent behavior, such as showing positive perception of the Free Trade Agreement (FTA) between the United States and Argentina. President Trump said on the same day, "We will consider signing an FTA with Argentina." One side is threatening to impose tariffs, while the other is discussing the FTA.
[Washington correspondent Choi Seungjin]
