Trump's Tariff Policy Sparks Trade War with China, Canada, Mexico

On February 1, 2025, President Trump declared an economic emergency, imposing 10% tariffs on all imports from China and 25% on those from Mexico and Canada, citing issues such as fentanyl trafficking and immigration. This has prompted retaliation from both Canada and Mexico, raising fears of a trade war that could disrupt North American supply chains and impact key industries. The tariffs on Chinese goods are expected to make exports more expensive, potentially decreasing demand and impacting China's economic growth, as the U.S. is a significant trading partner. Additionally, there are discussions in Congress about repealing the Permanent Normal Trade Relations (PNTR) status for China, which could lead to tariffs as high as 100%. Such moves reflect growing bipartisan support for stricter trade measures against China, driven by concerns over its trade practices. The evolving trade tensions are likely to have broader implications for global markets and foreign investment strategies.