[ROLLING ANALYSIS] Tariff Developments

March 3rd/4th

US Action

• US President Trump proceeded with tariffs on imports from Canada and Mexico (i.e. ended the pause) and the extra 10% on China also seemingly came into effect as the tariff order was not altered.


• On agricultural products, Trump posted “Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd…”


• On the 3rd, Trump said “there is no room for a deal on tariffs with Mexico and Canada” and he will be penalising nations weakening currencies with tariffs, mentioned China in this context; does not believe China will retaliate too much.

Retaliation

• Canada: will start with 25% tariffs on US imports worth CAD 30bln from Tuesday, while it will impose tariffs on an additional CAD 125bln worth of US imports in 21 days. Also, in active discussions with provinces and territories to pursue several non-tariff measures if US tariffs do not cease.


• China: additional tariffs of up to 15% on some US goods from March 10th, on US chicken, wheat, corn, and cotton. 10% tariffs on US soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables, and dairy products. Added 15 US entities to the export control list and 10 firms to the unreliable entity list; banned the import of Illumina (ILMN) gene sequencing machines as of March 4th.

February 28th

• China's Foreign Minister, on the remarks from US President Trump around an additional 10% tariff, says the US is once again using fentanyl as a pretext for threatening China. China opposes the tariff move. Will take all necessary measures to safeguard their legitimate interests. Rubio's speech was filled with "cold war mentality", adds the US coercion will backfire. China is willing to cooperate.

February 27th

China

• US President Trump said there will be an additional 10% tariff on China and clarified that there will be a 10+10 tariff on China for 20%, while he stated they are not seeing progress on drugs coming into the country and that Canada should be apprehending much more fentanyl.

EU

• Trump also criticised EU VAT taxes and said he doesn’t like the way the EU is treating US companies, as well as noted they are going to have reciprocal tariffs and responded will have to take a look when asked if there will be sanctions on the UK.

UK

• US President Trump said UK PM Starmer is a tough negotiator and that the US and UK have a special relationship, while he added that meetings with UK PM Starmer were tremendously productive and they are going to have a deal done on trade with the UK rather quickly.

Canada/Mexico

• Canadian PM Trudeau said they will have an immediate and extremely strong response if the US imposes tariffs next Tuesday.


• Mexico's Deputy Economy Minister said Mexico is analysing other measures, after imposing tariffs on low-cost imports.

February 26th

Canada/Mexico

• US President Trump said they are not stopping the tariffs and tariffs will go on, not all but a lot of them, while he also stated that Canada and Mexico tariffs go into effect on "April 2nd" and that they don't need Canada's lumber.


• US Commerce Secretary Lutnick clarified if President Trump is satisfied by the March 4th deadline (in relation to tariffs in response to fentanyl and border security), President Trump could pause fentanyl and border-related tariffs, but global tariffs still come into effect on April 2nd.


• White House still plans to implement 25% tariffs on imports from Canada and Mexico next week, at least for now — despite comments from US President Trump that raised hopes of another delay, according to Axios.


• Mexico’s Deputy Foreign Trade Minister said Mexico is working with US officials to reach an agreement on tariffs before the deadline and US officials are recognising Mexico’s efforts in addressing illegal drugs and migration.

EU

• Trump said he will be announcing tariffs on the EU very soon and that the EU can try to retaliate on tariffs, as well as noted that EU tariffs are to be 25% on autos and other things.


• EU will  react 'firmly and immediately' to US tariff, according to AFP citing a European Commission source.

Analysis details (07:10)

Tariff Timeline

• 
  February 4th - US additional 10% tariff on China on top of existing levies came into effect. Chinese export controls on tungsten, tellurium, bismuth, molybdenum and indium took effect (no specific countries mentioned).


• 
  February 10th - Chinese tariffs against the US took effect (15% tariffs on US coal & LNG, 10% tariffs on US oil).


• 
  February 13th - Trump signed his plan for reciprocal tariffs, albeit delayed their implementation.


• 
  March 4th - Tariff pause on Mexico and Canada expires; Additional 10% tariffs on China to go into effect on top of Feb 4th tariffs.


• 
  March 12th - 25% tariff on steel and aluminium imports comes into effect, with "no exceptions or exemptions"


• 
  April 1st - Completion of the US trade policy review.


• 
  April 2nd - Auto tariffs "in the neighbourhood of 25%" comes into effect.


• 
  TBC - pharma and semiconductors tariffs.

Tariffs Tally

• 
  US reciprocal Tariffs: Trump on February 13th signed his plan for reciprocal tariffs, albeit delayed their implementation. The delay allows Trump admin to launch negotiations on a one-by-one basis with nations that could be impacted. The studies of each country could be completed by April 1st.


• 
  US tariffs on steel and aluminium: US President Trump signed proclamations on Monday 10th February 2025 to reimpose a 25% tariff on steel and aluminium imports and declared there are no exceptions or exemptions, effective March 12th.


• 
  US tariffs on agriculture: Trump: “To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!”


• 
  US on China: Additional 10% tariff on top of existing levies, no exclusions, came into effect at 12:01 EST on February 4th. Note, Trump did not clarify whether or not imports Chinese metals would face double tariffs, as he has already imposed a 10% tariff on Chinese goods. Extra 10% duty came into effect at 12:01EST on March 4th. 


• 
  China's retaliatory tariffs: Chinese tariffs against the US took effect on February 10th and with officials also said to be building a list of US tech firms for potential probes. China imposed 15% tariffs on US coal & LNG, 10% tariffs on US oil, agricultural machines, and some autos; Tariffs imposed in direct response to Trump's 10% tariffs, according to the Chinese Finance Ministry. China also announced export controls (no specific country mentioned) on tungsten, tellurium, bismuth, molybdenum and indium. Following the US’ extra 10%, China announced 15% on US chicken, wheat, corn, and cotton; 10% on US soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables, and dairy products; 15 US entities to the export control list; 10 US firms to the unreliable entity list; banned the import of Illumina (ILMN) gene sequence machines to China.


• 
  US on Canada and Mexico: Tariffs on imports from these countries have been paused for 30 days to allow for negotiations on border security and drug trafficking issues. Pause was initiated on February 3, 2025, is set to expire on March 4, 2025, at 12:01am. The pause expired, with Trump stating “there is no room left for a deal on tariffs on Mexico and Canada”.


• 
  Canada’s retaliatory tariffs: Following the end of the pause on March 4th, Canada said it would start with 25% tariffs on US imports worth CAD 30bln from Tuesday, while it will impose tariffs on an additional CAD 125bln worth of US imports in 21 days. Furthermore, it said tariffs will remain in place until the US trade action is withdrawn and it is in active discussions with provinces and territories to pursue several non-tariff measures if US tariffs do not cease.

04 Mar 2025 - 07:10- ForexGeopolitical- Source: Newsquawk