Canada escapes Trump’s new import tariff, but global retaliation risks rattle financial leaders
US President Donald Trump announced a 10 percent baseline tariff on all imports into the US, with elevated duties for key trading partners.
While Canada and Mexico have been exempted from the new global tariff, existing tariffs of up to 25 percent remain in place on selected Canadian and Mexican goods.
The White House cited fentanyl trafficking and border issues as the rationale.
The announcement signals renewed global trade tensions that could affect portfolio allocations, commodity prices, export-heavy equities, and currency movements.
According to Reuters, reactions from G7 leaders and key global economies suggest the likelihood of retaliatory measures, which may destabilise international supply chains and influence global GDP forecasts.
Higher duties and targeted nations
The US administration introduced elevated tariffs on multiple partners beyond the 10 percent baseline:
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China: 34 percent added to the earlier 20 percent, totalling 54 percent
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Taiwan: 32 percent
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South Korea: 25 percent
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Japan: 24 percent
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European Union: 20 percent
Brazil was also hit with the minimum 10 percent tariff, prompting its foreign ministry to evaluate actions for trade reciprocity, possibly via the World Trade Organization.
Global economic partners warn of impact
European Commission President Ursula von der Leyen called the announcement a “major blow to the world economy” and warned that it would fuel protectionism.
She said the EU is preparing countermeasures and noted that while she agrees the global trading system has “serious deficiencies,” the tariffs will have “dire” consequences for millions.
German Chancellor Olaf Scholz said the decision undermines a global trade system that has created worldwide prosperity and warned that the move could backfire on the US.
German Economy Minister Robert Habeck called for pressure from Europe in response.
France’s Prime Minister Francois Bayrou described the move as a “catastrophe” for the US and Europe, while Italy’s Prime Minister Giorgia Meloni said a trade war would weaken the West.
Ireland’s Prime Minister Micheal Martin said 20 percent tariffs on EU imports were “deeply regrettable” and emphasised job protection.
Spain’s Prime Minister Pedro Sanchez criticised the lack of differentiation in the US move, and Swedish Prime Minister Ulf Kristersson said Europe wants a return to cooperative trade.
Swiss President Karin Keller-Sutter said economic interests must guide the country’s response.
UK Prime Minister Keir Starmer confirmed that economic deal talks with the US continue but stressed that no agreement would be signed unless it benefits the national interest.
Asia-Pacific leaders signal strong opposition
China’s Commerce Ministry said the tariffs disregard multilateral agreements and that “there are no winners in trade wars.”
Beijing vowed to take countermeasures to protect its interests and called for equal-footing negotiations.
Japanese Prime Minister Shigeru Ishiba voiced concerns over impacts on the global trading system and the Japan-US relationship.
Japan’s Trade Minister Yoji Muto said a response must be “careful but bold and speedy.”
South Korea’s Acting President Han Duck-soo said the government would mobilise all its resources to manage the crisis.
Australian Prime Minister Anthony Albanese stated the tariffs “have no basis in logic” and are “not the act of a friend,” warning they will increase costs for American households.
New Zealand Trade Minister Todd McClay confirmed the bilateral relationship remains strong but said Wellington would consult exporters and the US administration to gauge impact.
Taiwan, also facing a 32 percent tariff, joined in condemning the move. Financial advisors may want to monitor export-sensitive sectors across the Asia-Pacific region for signs of repricing or guidance cuts.
North and South America seek targeted responses
Canada remains exempt from the new 10 percent tariff but continues to face up to 25 percent tariffs on certain goods.
Prime Minister Mark Carney said Trump “has preserved a number of important elements” of the bilateral trade relationship, but added, “we are going to fight these tariffs with countermeasures” and “protect our workers.”
Mexico’s President Claudia Sheinbaum confirmed the country would not engage in a “tit-for-tat on tariffs” and would instead release a “comprehensive programme” in response.
Colombian President Gustavo Petro stated the country would only raise tariffs if US imports led to job losses. Brazil’s foreign ministry said it would assess all legal options to guarantee reciprocity in trade.
Political tones and pushback within Europe
European Parliament party leader Manfred Weber characterised the move as driven by “resentment” rather than fair trade principles. He said Europe is united and prepared to defend its interests while remaining open to negotiations.
Market and advisory implications
Trump’s tariffs, especially the large increases against China, may heighten volatility in sectors reliant on global trade, such as manufacturing, tech, and logistics.
Currency fluctuations may follow as countries consider countermeasures or appeal to the WTO.
The response from Beijing and Brussels, in particular, could impact global equity markets and commodities.
