MercoPress. South Atlantic News Agency

Trump's tariffs become effective, but new compromise expected

Trump is expected to announce a compromise with Canada and Mexico as early as Wednesday, Commerce Secretary Howard Lutnick admitted

The United States implemented tariffs on imports from Mexico, Canada, and China, triggering responses from these nations and causing a market meltdown. The tariffs include a 25% levy on imports from Mexico and Canada and an increase from 10% to 20% on goods from China. The move seeking to address fentanyl trafficking and border security has failed to meet expectations.

In response, China announced tariffs on US agricultural products and added US companies to its export control list. Canada imposed retaliatory tariffs on US goods, while Mexico plans to announce measures soon.

However, US President Donald Trump is expected to announce a compromise with Canada and Mexico as early as Wednesday, which could scale back his new 25% tariffs on top U.S trading partners, Commerce Secretary Howard Lutnick admitted after the US stock market limped to a close for a second day of sharp declines. The potential agreements would likely involve scaling back at least part of Trump’s new 25% tariffs on imports from Mexico and Canada, he added.

Lutnick’s comments came minutes after the stock market's negative performance for a second day in a row, spurred in part by investors’ fears that Trump’s aggressive policies will freeze trade between the world's major economies. All Wall Street stock indexes were showing losses at mid-morning.

The compromises with Canada and Mexico would likely be revealed as soon as Wednesday, Lutnick told Fox Business.”

The Chinese Ministry of Finance announced that starting March 10, it will impose tariffs of 10% and 15% on US agricultural products. According to Beijing, 15% tariffs will be imposed on chicken, wheat, corn, and cotton, while soybeans, pork, beef, aquatic products, fruits, dairy products, vegetables, and sorghum will be taxed at 10%. The Chinese government argued that the tariffs imposed by Washington were “unilateral” and harmed trade, increasing the burden on US companies and consumers. In the last two years, US agricultural exports to China fell by as much as 20%, which could be exacerbated by these measures.

In addition, China added a group of US companies to its export control list and another to its list of untrustworthy entities. Moreover, the case will be taken to the World Trade Organization (WTO), Chinese authorities stressed.

In a harsh statement, Canada's Prime Minister Justin Trudeau said there was no justification for the measure and announced new tariffs on Canadian purchases of US products. “Let me be unequivocally clear: there is no justification for these actions,” he underlined.

“While less than 1 percent of fentanyl intercepted at the US border comes from Canada, we have worked tirelessly to address this scourge that affects Canadians and Americans alike,” he added.

He also pledged not to let Trump's measure slide by and announced tariffs of 25%, some effective immediately and the others in 21 days. “Our tariffs will remain in place until the US trade measure is withdrawn and, if US tariffs do not cease, we are in active and ongoing discussions with provinces and territories to implement various non-tariff measures. While we urge the US administration to reconsider its tariffs, Canada remains steadfast in defending our economy, our jobs, our workers and a fair deal,” the Canadian leader also pointed out.

Meanwhile, Mexican President Claudia Sheinbaum Pardo agreed with Trudeau that Trump's decision had no justification and insisted that, during the 30-day pause agreed upon on Feb. 4, her government had developed actions to combat organized crime and fentanyl trafficking.

”Yesterday the government of the United States after 30 days of pause decided unilaterally to impose 25% tariffs on exports from Mexico (...) in this period forceful actions were developed against organized crime and fentanyl trafficking, as well as bilateral security and trade meetings that reached substantive cooperation agreements between the two countries,“ she argued Tuesday.

Sheinbaum also mentioned that she had decided to respond with ”tariff and non-tariff measures,“ but the scope of her plan ”will be announced next Sunday, March 9.“. She nevertheless clarified that she was not trying to ”initiate an economic or commercial confrontation.”