U.S. tariffs on Canada and Mexico take effect, as China takes aim at U.S. farm exports

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“It’s chaotic, especially compared to the way we saw tariffs rolled out in the first (Trump) administration,” said Michael House, co-chair of the international trade practice at the Perkins Coie law firm. “It’s unpredictable. We don’t know, in fact, what the president will do.’’

Democratic lawmakers were quick to criticize the tariffs, and even some Republican senators raised alarms.

Sen. Susan Collins, R-Maine, said she’s “very concerned” about the tariffs going into effect because of her state’s proximity to Canada.

“Maine and Canada’s economy are integrated,” Collins said, explaining that much of the state’s lobsters and blueberries are processed in Canada and then sent back to the U.S.

The world economy is now caught in the fog of what appears to be a trade war.

Even after Trump announced Monday that the tariffs were going forward, Canadian officials were still in touch with their U.S. counterparts.

“The dialogue will continue, but we are ready to respond,” Canadian Defense Minister Bill Blair said in Ottawa as he went into a special Cabinet meeting on U.S.-Canada relations. “There are still discussions taking place.”

Shortly after Blair spoke, Trudeau said Canada would impose 25% tariffs on $155 billion Canadian ($107 billion U.S.) worth of American goods, starting with tariffs on $30 billion Canadian ($21 billion U.S.) worth of goods immediately and on the remaining amount on American products in three weeks.

“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau said.

The White House would like to see a drop in seizures of fentanyl inside the United States, not just on the northern and southern borders. Administration officials say that seizures of fentanyl last month in everywhere from Louisiana to New Jersey had ties to foreign cartels.

Damon Pike, technical practice leader for customs and trade services at the tax and consulting firm BDO, suggested the responses of other countries could escalate trade tensions and possibly increase the economic pressure points.

“Canada has their list ready,” Pike said. “The EU has their list ready. It’s going to be tit for tat.’’

The Trump administration has suggested inflation will not be as bad as economists claim, saying tariffs can motivate foreign companies to open factories in the United States. On Monday, Trump announced that Taiwan Semiconductor Manufacturing Company, the computer chipmaker, would be investing $100 billion in domestic production.

Still, it can take time to relocate factories spread across the world and train workers with the skills they need.

Greg Ahearn, president and CEO of The Toy Association, said the 20% tariffs on Chinese goods will be “crippling” for the toy industry, as nearly 80% of toys sold in the U.S. are made in China.

“There’s a sophistication of manufacturing, of the tooling,” he said. “There’s a lot of handcrafting that is part of these toys that a lot of people don’t understand … the face painting, the face masks, the hair weaving, the hair braiding, the cut and sew for plush to get it to look just so. All of that are very high hands, skilled labor that has been passed through generations in the supply chain that exists with China.”

For a President who has promised quick results, Ahearn added a note of caution about how quickly U.S. factories could match their Chinese rivals.

“That can’t be replicated overnight,” he said.

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Republished with permission from The Associated Press.