Donald Trump signed three executive orders for tariff hikes on Saturday that signified the start of his trade war against his biggest trading partners.
These orders imposed a 25% duty tariff on imports from Canada and Mexico and a 10% increase in duty for products from China. However, within 48 hours, two of the tariff hikes were postponed for 30 days after Trump held talks with the Canadian and Mexican presidents.
The neighbouring countries seemingly agreed to ramp-up security on their borders with the US during their respective phone conversations and Mexico has agreed to send 10,000 troops to their border to stem the flow of illegal drugs.
The tariff on imports from China is already live (from February 4th). Products enroute and in the final mode of transport before 1st February should be exempt from the additional 10% duty, provided the customs entry is submitted before 7th March.
The US President indicated that 10% is an ‘opening salvo’ on China and if an agreement cannot be reached then tariffs could become ‘very, very substantial’.
Trump suggested on Monday that he would be talking to his Chinese counterpart ‘soon’. However, after China retaliated and imposed additional tariffs of their own on some US products, he has since added that he is in no hurry to make that call.
Trump also discussed Europe and the UK this week. Asked about the European trade bloc, Trump said that tariffs will “definitely happen” for the EU, but was not as adamant about penalising the UK. While he stated that the UK “is out of line” on trade with the US, he also added that he was confident the UK situation “can be worked out” without tariffs.
Killick Martin is monitoring the evolving situation very closely. Should you require further information regarding the above, then please do not hesitate to contact a member of the team.
