China and Canada retaliate as US trade tariffs kick in
Published: 05:49 04 Mar 2025 EST
The United States of America went ahead with blanket 25% border tariffs on all imports from neighbours Canada and Mexico, and doubled a 10% tariff against China, which were met with some quick retaliatory measures.
Canada immediately hit back with a 25% charge on $30 billion of US imports and promised more wide-ranging reciprocal action for the end of the month.
China also began to fire out retaliatory tariffs, imposing an 10-15% levy on various US farm and food products, halting imports of US logs, suspending imports of soybeans from three US companies and placing 25 US firms under export and investment restrictions.
Imports of Illumina Inc (NASDAQ:ILMN, ETR:ILU) gene sequencers were also banned, among individual measures taken.
US stocks tanked late on Monday's session, and European stocks tumbled lower on Tuesday, with the US confirming that it would suspend all military aid to Ukraine and a fall in oil prices also contributing as OPEC+ confirmed that it would increase supply.
The US dollar index fell 0.7% on Tuesday, with the euro up 0.5% to $1.0544 and the pound up 0.3% to $1.274.
"Today marks a turning point in Donald Trump’s tariff policy," said market analyst Ipek Ozkardeskaya at Swissquote Bank.
Strategists at Citi said markets had been taking Trump tariff announcements with "relative calm", but that was due to skepticism on the amount of tariffs that were coming. There had been a "lack of any tariff premium" priced into the US dollar.
Kathleen Brooks, research director at XTB, noted that Donald Trump's trade measures were the largest US tariffs since the 1930s, while China's immediate response "will be interesting to see how these retaliatory tariffs go down in Trump’s home turf, and whether he sees a shift in support on the back of this.
"If he does, will this force him to change his stance? Tariffs did not do much to help the global economy or geopolitics 100 years ago. Trump, who professes to hate war, should remember the lessons that history teach us."
