Mounting trade wars between the United States and its largest economic partners deepened on Tuesday as US tariffs on Canada, Mexico and China kicked in, sparking swift retaliation from Beijing and Ottawa.
Stinging US tariffs on Canadian and Mexican goods came into effect as a deadline to avert President Donald Trump's levies passed without the nations striking a deal - a move set to snarl supply chains.
In pushing ahead with the duties, Trump cited a lack of progress in tackling the flow of drugs like fentanyl into the United States.
The duties stand to impact over $918 billion (R17 trillion) worth of US imports from both countries.
The sweeping duties on Canada and Mexico are set to snarl supply chains for key sectors like automobiles and construction materials, risking cost increases to households.
Mexico supplied 63 percent of US vegetable imports and nearly half of US fruit and nut imports in 2023, according to the US Department of Agriculture.
And the United States imports construction materials from Canada, too, meaning tariffs could drive up housing costs.
Trump also inked an order Monday to increase a previously imposed 10 percent tariff on China to 20 percent - piling atop existing levies on various Chinese goods.
Beijing condemned the "unilateral imposition of tariffs by the US" and swiftly retaliated, saying it would impose 10 and 15 percent levies on a range of agricultural imports from the United States.
China's tariffs will come into effect next week and will impact tens of billions of dollars in imports, from US soybeans to chickens.
Beijing's foreign ministry vowed to fight a US trade war to the "bitter end."
"The Chinese people will not be intimidated," spokesman Lin Jian said.
And after Trump earlier announced tariffs on EU products would be 25 percent, France's Economy Minister Eric Lombard called for the European Union to reach a "balanced deal" with Washington.
Canadian Prime Minister Justin Trudeau on Monday pledged to impose retaliatory 25 percent tariffs on Washington, saying in a statement: "Canada will not let this unjustified decision go unanswered."
Mexican President Claudia Sheinbaum said her country has contingency plans.
Asian stocks pare their losses after China's retaliatory tariffs
Asian markets recouped some of their early losses in volatile trade on Tuesday after China announced fresh tariffs on US imports in retaliation to President Donald Trump's latest levies.
This as fears of a full-blown trade war increased volatility in markets across Asia.
Tokyo and Hong Kong recovered some of their losses after China announced its retaliatory tariffs.
The Nikkei was down 1.2 percent, while the Hang Seng rose by 0.5 percent.
Shanghai, Bangkok and Manila were also slightly up, while Sydney, Wellington, Taipei, Jakarta, Kuala Lumpur and Seoul were down.
Japanese automakers with Mexican factories in their supply chains also suffered, with Nissan, Toyota and Honda among the major losers.
"The spectre of a full-blown trade war is once again looming, threatening to choke global economic growth just as investors were starting to regain confidence," said Stephen Innes of SPI Asset Management.
Investors are hoping that China will announce a huge economic stimulus package at its key parliamentary meeting, the National People's Congress, on Wednesday.
"In the upcoming National People's Congress, Chinese policymakers could provide more pro-growth measures including announcing a larger budget deficit target and maintaining a five percent growth target for this year," said MUFG Bank's Lloyd Chan.
Both the Mexican peso and Canadian dollar have dropped against the greenback over the past few days.
The oil market also saw sharp declines, with West Texas Intermediate crude falling to $67.99 per barrel and Brent crude dropping to $71.05 per barrel at around 07.00 GMT.
Bitcoin's price plunged nearly 10 percent on Monday as concerns of an escalating trade war pushed investors to seek safer investments.
Bitcoin and similar digital assets had surged at the weekend after Trump suggested creating a national cryptocurrency reserve.
"Everything is getting sold," Forexlive manager Adam Button said. "There's a de-risking that's unfolding" among crypto investors, he said.
AFP