🔴 The details that turned the tables
In a dramatic development in global economic relations, U.S. President Donald Trump announced new tariffs of 34% on China, leading to a swift and firm reaction from Beijing with similar retaliatory tariffs, indicating that the two countries have entered a spiral of escalation that may be the most intense in the history of modern trade relations.
The recent escalation of the tariff war
Trump did not hesitate to escalate further, stating directly: "China has not responded to my warnings... And if it does not back down by tomorrow, we will raise tariffs to 104%." This threat goes beyond being a political maneuver to become a clear declaration of the U.S. readiness to go far in this economic confrontation.
The crisis has not been limited to China alone; it has extended to include America's northern partners, as Canada and Mexico have entered the fray, announcing their plans to respond to Trump's trade measures.
Practical steps that have already begun
Since yesterday, the tariffs promised by Trump have come into effect:
25% on imports from Canada and Mexico
10% on imports from China
These tariffs mean a direct increase in prices for products coming from these countries to the U.S. market, placing an additional burden on American companies and consumers.
Illustrative example
If a Canadian company exports a car worth $100,000 to the U.S. market, the new 25% tariff will make its cost to the U.S. importer $125,000. This increase will ultimately be passed on to the American consumer in the form of higher prices.
The strategy behind Trump's decisions
Trump's motivations for imposing these tariffs can be understood through two main axes, despite raising prices for American citizens.
Long-term market restructuring... Encouraging consumers to buy alternative American products...
Encouraging foreign companies to relocate their factories to within the United States
The ultimate goal is to boost the local economy, create more job opportunities, and reduce dependence on foreign supply chains
Using tariffs as a political pressure tool
Against Canada and Mexico: to renegotiate the terms of current trade agreements
Against China: to exert pressure in other areas such as preventing drug trafficking (fentanyl)
Addressing non-commercial issues: such as illegal immigration through the use of economic pressure
International reactions
The affected parties did not delay in responding to the U.S. measures:
Canada: imposed a 25% tariff on U.S. imports as a retaliatory measure
Mexico: announced its intention to take similar measures in response to U.S. decisions
China: Beijing has taken a multidimensional strategy in its response:
First: direct tariff measures
Imposing a 34% tariff on American goods
Halting imports of specific American agricultural products such as sorghum, poultry, and bone meal
Second: deeper strategic restrictions
Imposing a ban on the export of certain rare earth metals effective April 4
Listing 16 American companies on the export control list
Targeting technology companies that produce components with dual uses (civil and military)
The most prominent prohibited products
Electronic chips used in civilian and military devices
Encryption software for sensitive data
Dual-use communication equipment
China justifies these measures as protecting its national security and preventing the leakage of advanced technologies that could be used to develop weapons or support countries it considers hostile.
What is on Trump's mind - the numbers reflect a reality that explains Trump's hardline stance
Canada: heavily relies on the U.S. market, where 76% of its exports go to America, representing 19% of its GDP
Mexico: more dependent, as its exports to America account for 78% of its total exports and represent 37% of its GDP
The United States: its exports to Canada and Mexico account for only 2.7% of its GDP
This disparity in interdependence gives Washington leverage in negotiations, as the potential damage to its trade partners far exceeds the harm to the U.S. economy.
The current scene and future prospects
The current situation witnesses intensive use of maximum pressure tactics from all parties:
The United States: using tariffs and the threat of further escalation
China: combining export restrictions with diplomatic moves (filing a complaint with the World Trade Organization)
Canada and Mexico: adopting a policy of reciprocity despite being more affected
As this escalation continues, the question remains: Will this conflict lead to a reshaping of the global trade map, or will the parties manage to reach settlements that spare the world the consequences of a full-scale trade war? The coming months will be crucial in determining the course of this crisis and its implications for the global economy.
