TOI correspondent from Washington: Americans are bracing to cough up higher prices for food, cars, electronics, home appliances, toys, and footwear among a host of other products after US President Donald Trump, while presenting himself as a peacemaker between Russia and Ukraine, plunged the country into a trade war, with punitive tariffs on imports from its three largest trading partners China, Canada, and Mexico.
All three countries retaliated hours after Trump pressed ahead on Tuesday midnight with the 20 to 25 per cent tariffs that he had previously announced, ostensibly to staunch the flow of the opioid fentanyl that is killing thousands of Americans each year, but also to level the playing field in trade that the US President has complained is lopsided.
Washington has racked up a record trade deficit of $1.2 trillion, importing for its consumption-addicted people more than it exports to the world. Trump wants major trading partners to either buy more American goods and products or return to the US the manufacturing mojo it has lost over the years.
India, a relatively minor US trading partner, has so far escaped being singled out for additional tariffs although Trump has said the US would impose reciprocal duty on every country.
The US stock market, Trump’s favorite metric of how well the economy is doing, took a beating, with all three indices, the Dow, Nasdaq, and S&P plunging sharply (Pl add latest numbers from wires).
Trump has repeatedly claimed tariffs will make the US richer and return manufacturing to the country, while most experts reckon it will also raise prices of many goods and make life difficult for Americans, even as it hurts Washington’s major trading partners. The punitive action is also wrecking Washington’s convivial ties with its closest neighbors.
Nearly 80 per cent of Mexico’s exports go to the US and the tariffs are expected to push the country into a recession. On the flip side, Americans will be pay higher prices for fruits and vegetables, including the much-loved avocado, which alone accounts for $ 3 billion of the $46 billion of agricultural products Mexico exports to the US.
Canada too exports grain, livestock and meats, poultry and energy to the US, and Canadian leaders were particularly vehement lashing out at Washington. “Because of the tariffs imposed by the US, Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs,” Canada’s Prime Minister Justin Trudeau, subject of much ridicule and trolling by Trump, said.
Mexico too has been offended by the Trump White House alleging that its officials have ties with drug traffickers, a charge Mexican President Claudia Sheinbaum said is “offensive, defamatory and baseless.” She is expected to announce a detailed list of retaliatory tariffs later this week.
China is in a different category, but retaliatory tariffs announced by Beijing is expected to increase prices of electronic goods, including TVs, laptops, cell phones, video game consoles, and monitors, as also home appliances like refrigerators, washing machines, and dish washers. The US also imports almost all the toys and shoes sold in America, mostly from China.
Trump is expected to elaborate on the tariffs, which he says is his favorite word, in a speech he is scheduled to deliver on Tuesday night to a joint session of Congress. The theme of the address is “The Renewal of the American Dream,” but for now many Americans are bracing for a nightmare of higher prices.