Local time on Monday, US President Trump took to social media, making a significant announcement. He declared that the United States would impose tariffs on "external" agricultural products starting from April 2. This move represents his latest attempt to erect trade barriers against imported goods, sending shockwaves through the global economic community.
In his post, Trump stated, "To the great farmers of America: Get ready to start producing large amounts of agricultural products for sale within the United States. Tariffs will be imposed on external products on April 2." However, he refrained from providing further details regarding which specific products would be affected or if there would be any exceptions. At present, it remains uncertain whether his plan is part of the previously announced effort to levy so-called "reciprocal" tariffs on nearly all of America's trading partners.
Earlier last month, Trump announced a 25% tariff on imported steel and aluminum. Subsequently, he directed relevant departments to determine reciprocal tariffs for each foreign trading partner. He also indicated that tariffs would be imposed on a wide range of industries, including automobiles, pharmaceuticals, semiconductors, timber, and copper. Trump claimed that all these measures were aimed at protecting the US industry and promoting American manufacturing. This has a direct bearing on industries that rely heavily on imported raw materials such as Steel Pipes, Steel Coils, and Section Steel. For instance, the construction and manufacturing sectors, which use these steel products extensively, may face higher production costs due to the increased tariffs on imported steel.
Trump's latest threat comes at a time when the US economy is in a vulnerable state. Persistent inflation remains one of the primary concerns for Americans. Many economists have warned that higher import taxes will further drive up prices, as businesses are likely to pass on the increased costs to consumers. Just last week, the US government announced a plan to invest $1 billion in a new strategy to mitigate the impact of avian influenza. This disease has led to a significant spike in egg prices and a decline in US milk production, both of which are major drivers of inflation.
Despite these economic challenges, US Secretary of Agriculture Brooke Rollins defended Trump's tariff policy, stating, "When Trump first used the tariff policy, it was successful, and I have no doubt it will succeed again." However, this view is not widely shared among economic experts.
In a subsequent news conference, Trump reaffirmed that the US plan to impose tariffs on Mexico and Canada would proceed as scheduled. Starting from Tuesday (March 4), a 25% tariff will be imposed on both countries. He said, "Tomorrow, a 25% tariff will be imposed on Canada and Mexico respectively. These tariffs are to force these two neighboring countries to strengthen border control."
The news had an immediate impact on the US stock market. The three major US stock indexes saw their declines continue to widen. The Nasdaq Composite Index fell by more than 3%, the S&P 500 Index dropped by 2%, and Nvidia plunged by more than 9%. Earlier on Monday, US Secretary of Commerce Howard Lutnick suggested that although Trump would take executive action on Tuesday, he might soften some of the tariff measures.
Canada's Minister of Foreign Affairs, Melanie Joly, responded firmly, "If Trump imposes tariffs, we are ready. We are prepared to impose tariffs on \(155 billion worth of US goods, and we are ready to impose tariffs on the first batch of \)30 billion worth of goods." Canada is one of the major trading partners of the US, and the tariff war will likely disrupt the trade of various goods, including those related to Steel Pipes, Steel Coils, and Section Steel. The Canadian steel industry, which exports a significant amount of these products to the US, will be severely affected, and in turn, it may lead to retaliatory measures that will also impact the US steel-consuming industries.
Trump's series of tariff announcements not only pose a threat to the economic stability of the United States but also have far - reaching implications for the global economy. The ongoing trade disputes may disrupt the global supply chain, especially in industries such as steel and agriculture, and further exacerbate the already fragile economic situation. As the situation unfolds, the world will be closely watching how the US and its trading partners respond to these new tariff threats.