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According to The Economist, Trump announced and then postponed 25% punitive tariffs on goods from Canada and Mexico. The US
president was using the tariff threat to press both countries to stop the flow of migrants and fentanyl across the border. He granted a 30-day reprieve following urgent talks with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau. Both leaders promised to boost their border security.
It is a heady time for the supporters of Trump as allies will not appease him forever. Both countries had earlier vowed to retaliate with tariffs of their own on American products. The European Union said it would also retaliate after Trump announced that he would "definitely" impose tariffs on EU imports over America's trade deficit with the European bloc. Consequently, the global markets shuddered.
When it comes to China, Trump did impose extra 10% tariffs on Chinese imports. China has set out its retaliation, which comes into force on February 10. Trump has vowed to strike more blows, including, perhaps, to fulfil his threats against the European Union and Taiwan.
On February 4, in addition to the new tariffs, the Chinese government listed several rare metals as controlled exports, giving Chinese President Xi Jinping the power to ban shipments to America at a moment's notice.
Although many rare metals are found in places such as Australia, Brazil, Greenland and South Africa, about 90% of the world's capacity for refining them is in China. China produces almost all of the world's germanium and manganese, three-quarters of its lithium and natural graphite and half its antimony.
Although Trump is convincing allies that the incentives will reverse, strong voices in European countries such as Germany and others are being raised to move closer to China.
Recently, on February 8, according to Reuters, Trump paused his administration's repeal of duty-free treatment of low-cost packages, known as de minimis, from China, giving the Commerce Department time to make the order workable, after the rapid change created disruptions for customs inspectors, postal and delivery services and online retailers.
Trump also said US consumers would feel the heat of tariffs on Chinese products. However, the newly imposed tariffs will not impact Chinese exports. China can easily diversify and enhance exports to other countries without caring about the US tariffs, while offsetting the potential shortfall in its exports to the US.
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