The People’s Republic of China is imposing retaliatory trade measures and restrictions after U.S. President Donald J. Trump imposed a new 10 percent tariff on goods imported from the communist country. Beijing announced on Tuesday that it has instituted tariffs on the importation of American coal, crude oil, farming equipment, trucks, and sedans. The Chinese tariff on coal is set at 15 percent, and the tariff on crude oil is 10 percent.
Initially, Canada and Mexico were also set to have tariffs imposed on their exports to the United States. However, both countries made eleventh-hour overtures to increase their cooperation with American border security and anti-drug trafficking efforts, leading President Trump to pause the imposition of tariffs on both.
While China’s autocratic President Xi Jinping and Trump were expected to discuss the tariffs and measures China needs to take to curb the export of fentanyl precursors to Mexican drug cartels on Tuesday, the call was abruptly canceled after the Asian nation announced its retaliatory response. Additionally, China is moving to initiate an antitrust investigation into the technology giant Google—a move considered part of the Chinese retaliation.
International trade experts note that the Chinese response was more measured than their actions when Trump imposed trade tariffs on the communist country during his first term. China’s newest move only impacts about $14 billion in American goods, far less than the Chinese goods affected by Trump’s tariffs.
During the prior trade fight, China moved to meet the U.S.-imposed tariffs point for point and suffered economic blowback.
The tariffs imposed by President Trump during his first term accelerated the American economy’s decoupling from its reliance on Chinese imports.
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The People's Republic of China is imposing retaliatory trade measures and restrictions after U.S. President Donald J. Trump imposed a new 10 percent tariff on goods imported from the communist country. Beijing announced on Tuesday that it has instituted tariffs on the importation of American coal, crude oil, farming equipment, trucks, and sedans. The Chinese tariff on coal is set at 15 percent, and the tariff on crude oil is 10 percent.
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President Donald J. Trump has signaled the possibility of imposing tariffs on European Union (EU) imports following similar actions against Canada and China. Tariffs on Mexico, originally part of the same executive order addressing Canada and China, were delayed by one month on Monday after Mexico’s President Claudia Sheinbaum announced she would send 10,000 Mexican National Guard to help secure and prevent the flow of fentanyl over the U.S. southern border.
Speaking with the press in Maryland as he returned to the White House from a brief trip to Florida, Trump said the imposition of tariffs on the EU could happen “pretty soon.” While the measures enacted against Canada—and potentially Mexico—are aimed at pushing the two countries neighboring America to crack down on the cross-border illicit drug trade and illegal immigration, tariffs against the EU would be more likely intended to end its trade imbalance with the U.S. in the automobile and agricultural sectors.
“They don’t take our cars, they don’t take our farm products, they take almost nothing and we take everything from them. Millions of cars, tremendous amounts of food and farm products,” President Trump said, clarifying that the United Kingdom would likely not face similar measures as the EU thanks to Brexit. While the President does contend that some British trade practices are “out of line,” he emphasized that a trade deal with Prime Minister Keir Starmer can be worked out.
EIGHTY YEARS OF UNFAIR TRADE.
The EU has expressed strong opposition to Trump’s tariff strategies against Canada, Mexico, and China, promising a response if targeted. Notably, the United States has a significant trade deficit with the EU’s leading economy, Germany.
Since the end of World War II, the American government has allowed Germany to maintain high tariffs on U.S. automobiles and steel without retaliation. The policy—established under the Marshall Plan in 1948—was intended to rebuild the German economy and prevent it from falling under the influence of the Soviet Union.
Today, the German economy is the largest in Europe and the third-largest in the world, and the Soviet Union no longer exists.
President Donald J. Trump has signaled the possibility of imposing tariffs on European Union (EU) imports following similar actions against Canada and China. Tariffs on Mexico, originally part of the same executive order addressing Canada and China, were delayed by one month on Monday after Mexico's President Claudia Sheinbaum announced she would send 10,000 Mexican National Guard to help secure and prevent the flow of fentanyl over the U.S. southern border.
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Mexico, Canada, and China were expected to announce retaliatory measures on Monday against the United States after President Donald J. Trump initiated broad-based tariffs on goods imported from the three countries. At midnight, an executive signed by Trump will take effect, imposing a 25 percent tariff on most goods imported into the country from Canada. The tariff on Mexico has been delayed for one month, according to an agreement announced by Trump and Mexican President Claudia Scheinbaum. In addition, a 10 percent tariff is being imposed on certain goods imported from China—this is on top of tariffs imposed on the Asian nation by Trump during his first term and largely left in place by former President Joe Biden.
Canada is expected to raise tariffs on American lumber, plastics, and other industrial products in response. Meanwhile, Mexico will likely target American agricultural products as well. China has also stated it will take retaliatory measures but has offered no further details.
INFLATION? UNLIKELY.
While President Trump’s political opponents claim his imposition of tariffs—which the White House explains are to put pressure on Canada and Mexico to curb the flow of fentanyl into the U.S.—will cause a resurgence of inflation and price increases on everyday goods, this will not likely be the case.
Broadly speaking, tariffs are an excise tax on imports. Goods with an elastic supply—meaning they can be sourced domestically or from countries other than Canada, Mexico, or China—will mostly be unaffected as supply chains shift. Most agricultural goods are elastic, and consumers are unlikely to see any significant increase in grocery costs.
U.S. Treasury Secretary Scott Bessent has also disputed claims that tariffs are inflationary. The former macro fund manager and economist argues that tariffs—like other forms of taxation—decrease demand, which has a deflationary effect. Notably, the most infamous tariff in American history, the Smoot-Hawley tariff enacted in the early stages of the Great Depression, had a deflationary impact.
MINIMAL IMPACT ON CONSUMERS.
Despite the dubious claims made by Democrat lawmakers and their corporate media allies, the overall impact of the 25 percent tariffs on Mexico and Canada is likely to be minimal and short-lived. The tariff itself applies to the cost of the product at import, which is well below its retail value. This means that your Mexican avocado, which costs $2.00 at the grocery, will only increase by 25 percent of its import cost—usually pennies on the dollar—and not its retail value.
Lastly, the so-called “trade war” sparked by the Trump White House’s imposition of tariffs is unlikely to endure for an extended period. Canada’s and Mexico’s economies heavily rely on exporting goods to the United States. Additionally, both countries have economies far smaller than America’s—Canada’s GDP in 2023 was $2.14 trillion (USD), and Mexico’s was $1.789 trillion (USD), while the United States saw a total GDP of $27.36 trillion (USD).
Neither Canada nor Mexico—with economies roughly 10 percent the size of the American economy—can absorb the economic decline resulting from the lower number of exports.
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Mexico, Canada, and China were expected to announce retaliatory measures on Monday against the United States after President Donald J. Trump initiated broad-based tariffs on goods imported from the three countries. At midnight, an executive signed by Trump will take effect, imposing a 25 percent tariff on most goods imported into the country from Canada. The tariff on Mexico has been delayed for one month, according to an agreement announced by Trump and Mexican President Claudia Scheinbaum. In addition, a 10 percent tariff is being imposed on certain goods imported from China—this is on top of tariffs imposed on the Asian nation by Trump during his first term and largely left in place by former President Joe Biden.
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JPMorgan Chase CEO Jamie Dimon is throwing his support behind President Donald J. Trump’s plan to enact aggressive tariffs on foreign trade. Speaking with the media on Wednesday at the World Economic Forum (WEF) in Davos, Switzerland, Dimon described Trump’s tariffs as a beneficial “economic weapon.”
“If it’s a little inflationary, but it’s good for national security, so be it. I mean, get over it,” Dimon said, adding: “National security trumps a little bit more inflation.”
However, President Trump’s tariffs may not even prove to be inflationary. The levies, by their nature, cause ‘demand destruction’ by suppressing the demand for foreign goods, which actually has a deflationary effect on prices. Some exporters may choose not to pass the costs of the tariffs on to consumers to avoid this.
Dimon, who heads the largest bank in the United States, emphasized that Trump’s tariff plan is aimed at protecting American economic and national security interests. Additionally, the JPMorgan Chase CEO argued the plan will bring foreign trade partners back to the negotiating table to address unfair imbalances.
HISTORY.
During Trump’s first term, Dimon had been vocal about the potential economic threats posed by tariffs. In multiple instances in 2018, he stated they “wouldn’t be a positive,” and in 2019, he continued to express concerns about their effects. However, early last year the banking titan appeared to warm to Trump, stating the America First leader “wasn’t wrong” about everything. Dimon specifically noted Trump’s push for NATO member countries to increase their defense budgets and the need to halt illegal immigration. In addition, he admitted Trump’s tariffs on China spurred a successful decoupling of the U.S. economy from America’s Asian adversary.
Trump, in his second term, has announced plans to introduce 25 percent tariffs on Canadian and Mexican products by next month, along with a 10 percent tariff on imports from China. In light of these plans, Dimon has reconsidered the utility of tariffs in international negotiations. He stated, “The question is how they get used… Can they be used to bring people to the table? Yes.”
JPMorgan Chase CEO Jamie Dimon is throwing his support behind President Donald J. Trump's plan to enact aggressive tariffs on foreign trade. Speaking with the media on Wednesday at the World Economic Forum (WEF) in Davos, Switzerland, Dimon described Trump's tariffs as a beneficial "economic weapon."
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Economist Peter Navarro will be returning to the White House, with President-elect Donald J. Trump announcing the tariff and trade guru will serve as his Senior Counselor for Trade and Manufacturing. After the Capitol riots on January 6, 2021, Navarro became a prime target of the lawfare campaign waged by Congressional Democrats and the Biden government—ultimately serving four months in federal prison for contempt of Congress.
During President Trump’s first term in office, Navarro—a Harvard Ph.D. economist—served as the White House’s Director of Trade and Manufacturing Policy and was one of the administration’s staunchest opponents of China. In addition, the University of California, Irvine professor emeritus is continuing to fight an appeal of his contempt of Congress conviction on constitutional grounds—with the case possibly heading to the U.S. Supreme Court.
The National Pulsereported in May that Trump said he absolutely would bring Navarro back to his second presidential administration.
“I am pleased to announce that Peter Navarro, a man who was treated horribly by the Deep State, or whatever else you would like to call it, will serve as my Senior Counselor for Trade and Manufacturing. During my First Term, few were more effective or tenacious than Peter in enforcing my two sacred rules, Buy American, Hire American. He helped me renegotiate unfair Trade Deals like NAFTA and the Korea-U.S. Free Trade Agreement (KORUS), and moved every one of my Tariff and Trade actions FAST,” President-elect Trump wrote on Truth Social.
Trump continued: “….The Senior Counselor position leverages Peter’s broad range of White House experience, while harnessing his extensive Policy analytic and Media skills. His mission will be to help successfully advance and communicate the Trump Manufacturing, Tariff, and Trade Agendas.”
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Economist Peter Navarro will be returning to the White House, with President-elect Donald J. Trump announcing the tariff and trade guru will serve as his Senior Counselor for Trade and Manufacturing. After the Capitol riots on January 6, 2021, Navarro became a prime target of the lawfare campaign waged by Congressional Democrats and the Biden government—ultimately serving four months in federal prison for contempt of Congress.
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President-elect Donald J. Trump says he will block the sale of U.S. Steel to Japan’s Nippon Steel, a move backed by both Republican and several Democratic Party lawmakers in Congress. Instead, Trump says he wants to impose tariffs to rebuild the United States’ domestic steel industry, making it more competitive in international markets. Vice President Kamala Harris had signaled more openness to allowing the foreign takeover of U.S. Steel should she have won the White House.
“I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan. Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again, and it will happen FAST!” President-elect Trump wrote in a post on Truth Social. He added: “As President, I will block this deal from happening. Buyer Beware!!!”
The sale of U.S. Steel to the Japanese-owned Nippon Steel is a critical issue for many Americans, especially those in the Rust Belt states of Pennsylvania and Ohio. During the 2024 presidential campaign, Trump, speaking with members of the Teamsters Union, promised he would “block it instantaneously.”
“We saved the steel industry. Now, U.S. Steel is being bought by Japan. So terrible,” he said.
On Capitol Hill, the opposition to the sale of U.S. Steel to Nippon Steel has become a bipartisan fight. Both of Pennsylvania’s Senators in the next Congress, John Fetterman (D-PA) and Dave McCormick (R-PA), have voiced their opposition to the takeover. Both will likely be key votes in backing Trump’s tariff and trade plans as well.
President-elect Donald J. Trump says he will block the sale of U.S. Steel to Japan's Nippon Steel, a move backed by both Republican and several Democratic Party lawmakers in Congress. Instead, Trump says he wants to impose tariffs to rebuild the United States' domestic steel industry, making it more competitive in international markets. Vice President Kamala Harris had signaled more openness to allowing the foreign takeover of U.S. Steel should she have won the White House.
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The tariffs enacted during President-elect Donald J. Trump’s first term in office—and largely continued under Joe Biden—are already fueling the start of a decoupling between the United States and the People’s Republic of China. When Trump’s tariffs first took effect in 2018, China accounted for just over 21 percent of U.S. imports. However, by 2023, that number has plunged to just below 14 percent.
Meanwhile, Mexico and Canada have seen their share among U.S. imports grow—albeit modestly. Currently, Mexico accounts for just under 16 percent of U.S. imports, up from around 12 percent in 2014. Canada, which saw its share of imports collapse over the last decade, has slightly rebounded and accounts for just under 14 percent of U.S. imports—about on par with China.
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Even with the modest increase in Mexican imports to the U.S., the data suggests the American economy is increasingly becoming more self-sufficient and less reliant on cheap products produced by China. President-elect Trump has promised to enact a new round of tariffs against China as the latter has continued its aggressive currency manipulation.
China routinely deflates its currency to create trade imbalances and maintain a cheap manufacturing environment. This practice disadvantages domestic industry in the U.S. Additionally, the rivalry between the U.S. and China necessitates further decoupling—especially among critical technology sectors—to further American national security interests.
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While Trump is pushing for new tariffs on a number of countries, those targeting China are far higher and more aggressive than those he intends to enact against countries in, for instance, the European Union. The latter is more an issue of trade leverage, with tariffs being a tool to push a ratcheting down of trade barriers.
The tariffs enacted during President-elect Donald J. Trump's first term in office—and largely continued under Joe Biden—are already fueling the start of a decoupling between the United States and the People's Republic of China. When Trump's tariffs first took effect in 2018, China accounted for just over 21 percent of U.S. imports. However, by 2023, that number has plunged to just below 14 percent.
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The United Kingdom could find itself exempt from President-elect Donald J. Trump’s tariff plans, with the America First leader having an affinity for the Brexit movement and several British leaders, including King Charles III and Reform Party leader Nigel Farage. Trump’s historical support for Brexit was at the core of an argument recently made by Governor Phil Murphy (D-NJ) during an appearance on Sky News.
“Donald Trump [has] some sympathy with the renegade who has courage. I think there’s some of that. I think that’s a card that can be played. We’ll see,” Murphy said, having traveled to Britain for an economic mission trip on behalf of the State of New Jersey. The Democrat governor, however, also suggested that not every nation enjoys Trump’s sympathy.
“If I’m China, I’m fastening my seatbelt right now,” Murphy said.
Throughout the 2024 election, Trump has said he intends to enact an aggressive U.S. trade policy with substantial import tariffs. The tariffs could reach up to 60 percent on Chinese products and 20 percent on goods from other countries.
LABOUR’S FOLLY.
Trump’s affinity for British leaders likely does not extend to those currently serving in the country’s Labour Party government. British Foreign Secretary David Lammy has infamously refused to apologize for previously calling Trump a “neo-Nazi sympathizing sociopath” and “tyrant.” Meanwhile, several other government ministers led a 2019 effort demanding that the then-Tory government cancel an official state visit by Trump.
Additionally, during the 2024 election, Labour staffers traveled to the U.S. to campaign on behalf of Trump’s opponent, Democrat Vice President Kamala Harris.
While the United Kingdom could be spared the brunt of Trump’s tariff plans, the European Union (EU) will likely be a top target. On the 2024 campaign trail, Trump proposed the “Trump Reciprocal Trade Act,” which would enforce a 10 percent tariff on all European imports unless they lower their own tariffs on U.S. goods.
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The United Kingdom could find itself exempt from President-elect Donald J. Trump's tariff plans, with the America First leader having an affinity for the Brexit movement and several British leaders, including King Charles III and Reform Party leader Nigel Farage. Trump's historical support for Brexit was at the core of an argument recently made by Governor Phil Murphy (D-NJ) during an appearance on Sky News.
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European politicians are expressing fear of President Donald J. Trump‘s running mate, Senator J.D. Vance (R-OH), worrying he may change the status quo policies on Ukraine and other issues. Some officials in European governments are already preparing for potential shifts in their relationship with the U.S. in the event of a second Trump administration.
Sen. Vance, a vocal critic of U.S. aid to Ukraine, asserted at this year’s Munich Security Conference that Europe should recognize a U.S. pivot towards East Asia. He suggested that American security commitments have allowed European security to diminish.
While some European leaders express confidence that a Republican administration will uphold NATO commitments despite Vance’s stance, concerns linger about potential trade disputes under another Trump presidency. A European Union (EU) diplomat compared the bloc’s preparations to a sailing vessel bracing for a storm.
Hungary’s Prime Minister Viktor Orbán has notably aligned himself with the Trump-Vance ticket, advocating for immediate peace talks between Russia and Ukraine upon a potential Trump victory.
Orban visited Zelensky in Kiev, Putin in Moscow, and former President Trump in Florida in recent weeks to discuss a path to peace. Vance recently expressed his admiration for the Hungarian leader, noting that America could learn from his policies.
In the United Kingdom, many leftist Labour Party supporters expressed anger over Vance due to clips circulating on social media in which he jokingly stated Britain may be the first Islamist power with nuclear weapons after Labour’s recent election victory.
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European politicians are expressing fear of President Donald J. Trump's running mate, Senator J.D. Vance (R-OH), worrying he may change the status quo policies on Ukraine and other issues. Some officials in European governments are already preparing for potential shifts in their relationship with the U.S. in the event of a second Trump administration.
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The continued Houthi rebel attacks on international shipping in the Red Sea and the Gulf of Aden are costing the world significant amounts of time and money.
The attacks have forced many maritime transport companies to reroute their ships around the African continent rather than using the shorter route through the Suez Canal. Rerouting ships around Africa’s Cape of Good Hope has added 3,500 nautical miles to the shipping route between Asia and the West. The use of the longer shipping route due to the Iranian-backed rebel attacks has drastically increased the cost of transporting goods.
Accounting for about 10 percent of the volume of global maritime trade, the Suez Canal and the Red Sea shipping route is arguably one of the most important in the world. Raw minerals, oil, liquified natural gas, grains, rice, and electronic goods have moved via ship through the region without incident for decades. However, when the Iran-backed Houthi rebels of Yemen began attacking shipping after Israel launched a military campaign against Hamas, traffic through the Suez Canal collapsed.
The longer Africa route and increased time at sea have driven up fuel costs for maritime shipping companies — as well as expenses for crew and maintenance. This has led to a drastic rise in container costs for those looking to move goods around the world. In January 2023, the average cost of a standard 40-foot (FEU), non-refrigerated container was around $1,759.93. Today, the price of a container has jumped up to $5,495.20 on average.
In January of this year, President Joe Biden announced the US and UK militaries would begin an air campaign against Yemen’s Houthis in an effort to put an end to the attacks. Additionally, the two nations have dispatched naval forces to the Red Sea and the Gulf of Aden to deter Houthi hijacking attempts. Despite numerous strikes against Houthi targets, the costly campaign has thus far failed. The Houthi rebels successfully sank a British container ship over the weekend.
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The continued Houthi rebel attacks on international shipping in the Red Sea and the Gulf of Aden are costing the world significant amounts of time and money.
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