OTTAWA (dpa-AFX) - Canada has announced 25 percent retaliatory tariffs on $107 billion worth of US imports within hours of President Donald Trump said he is proceeding with implementing the same tariff rate on goods from Canada and Mexico.
Mexican President Claudia Sheinbaum said her government has made 'contingency plans' to respond to the hike in import tariff, which will reportedly be announced Tuesday.
A tariff is a tax on imported goods, paid by the company importing the product. This will lead to increase in its retail price, the burden of which will have to be paid by the consumers.
Ontario Premier Doug Ford has threatened that power supply to the United States will be curbed in retaliation for the new tariffs. Canada is a major exporter of electricity to th U.S.
Announcing his decision that will trigger a fresh round of trade war between the United States and its major trade partners, Trump said he is proceeding with implementing tariffs on Canada and Mexico under the International Emergency Economic Powers Act 'to combat the extraordinary threat to U.S. national security, including our public health posed by unchecked drug trafficking.'
The White House said that while Trump gave both the neighboring countries ample opportunity to curb the dangerous cartel activity and influx of lethal drugs flowing into the U.S., they have failed to adequately address the situation.
It alleged that Mexican drug trafficking organizations, the world's leading fentanyl traffickers, operate unhindered due to an intolerable relationship with the government of Mexico.
There is also a growing presence of Mexican cartels operating fentanyl and nitazene synthesis labs in Canada, according to the White House.
The Trump administration cited both nations' failure to arrest traffickers, seize drugs, or coordinate with U.S. law enforcement as the reason for hiking the tariffs. It constitutes 'an unusual and extraordinary threat to America's security-demanding IEEPA action to force accountability and protect American lives, the White House said.
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