Donald Trump has admitted his tariffs on major trading partners will cause “a little disturbance” – as China said it was “ready” for “any type of war” with the US.
The US president made his comments in an address to Congress, hours after the levies on imports came into effect.
Producers in Mexico and Canada have been hit with a 25% tax on items they export to the US, while a 20% tariff has been applied to Chinese imports.
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Stock markets, which Mr Trump is said to pay close attention to, slid on the tariffs news.
Exporters in the affected countries as well as businesses in the US and economists have raised concerns about the potential price-raising impact of the tariffs.
Making imports more expensive will likely make goods more expensive and could push prices up across the board.
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A cycle of high inflation could lead to interest rates being higher for longer in the US, the world’s largest economy, which could dampen economic activity.
A slowed US economy would have global consequences but even without a hit to the States, there are fears of a global trade war – in which countries add their own trade barriers in the form of tariffs.
The Chinese embassy in the US posted on X: “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”
The president, however, said he was “just getting started” after 43 days into his second term.
China and Canada have retaliated with their own tariffs against the US.
From next week China will add its own 15% levy on a range of agricultural products such as chicken, wheat, corn and cotton.
An extra 10% will be added to soya beans, pork, beef, fruit, vegetables and dairy products imports.
The country has also raised additional complaints against the US with the World Trade Organisation (WTO).
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Canada’s prime minister Justin Trudeau said his country was launching its own WTO challenge and described the US tariffs as a “dumb thing to do”.
He also warned the move by the Trump administration would impact American workplaces and add to inflation in the US.
Addressing the American public, he said: “We don’t want this… but your government has chosen to do this to you.”
Canada has announced the imposition of 25% tariffs on US imports worth C$30bn (£16.3bn).
But US commerce secretary Howard Lutnick struck a different note on tariffs and on Monday said the president will “probably” announce a compromise with Canada and Mexico as early as Wednesday, which could scale tariffs.
