Washington: On Friday, U.S. President Donald Trump escalated trade tensions with Canada by announcing his intention to double tariffs on Canadian steel and aluminium imports to 50%. The decision follows Canada’s recent decision to slap a tax on electricity exported to the U.S. The new tariffs are scheduled to roll out on Wednesday.
So, Trump ordered his Commerce Secretary to slap a 25% tariff on all steel and aluminium imports from Canada, for a total of 50% effective tariff. This will likely trigger a feverish spike in steel prices in the States. The announcement sparked a major sell-off in the stock market, a meltdown termed the “Trump Slump.” In fact, the S&P 500 Index fell 2.7%.
These tariffs are designed to enable Trump to implement a comprehensive strategy aimed at protecting American manufacturers and bringing jobs back to the United States. But critics regard these actions as a massive tax hike that could influence all sectors from therapeutics, copper, timber, and computer chips, to name a few. Goldman Sachs slashed the U.S. growth forecast to 1.7% from 2.2% and raised the chance of recession to 20%.
But the White House is optimistic that these policies are helping American companies and driving job creation, regardless of market jitters. And Trump contends his tariffs will drive Honda, Volkswagen, and Volvo to build plants in the U.S.