Donald Trump to hit Canada, Mexico and China with tariffs today – amid fears US consumers could suffer
Donald Trump has said he will place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China from today.
The move raises fears of price increases for US consumers as the US president suggested he would try to blunt the impact on oil imports.
He has been threatening the tariffs to ensure greater co-operation from the countries on stopping illegal immigration and the smuggling of chemicals used for fentanyl.
And he has also pledged to use tariffs to boost domestic manufacturing.
Analysis by economics and data editor Ed Conway:
Trump’s changed tack to focus tariffs on Mexico and Canada – why?
“Starting tomorrow, those tariffs will be in place,” White House press secretary Karoline Leavitt told reporters on Friday.
“These are promises made and promises kept by the president.”
The tariffs carry both political and economic risks for Mr Trump.
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Many voters backed the Republican on the promise that he could cut inflation, but tariffs could trigger higher prices and potentially disrupt the energy, car, lumber and agricultural sectors.
Mr Trump had said he was weighing issuing an exemption for Canadian and Mexican oil imports.
“I’m probably going to reduce the tariff a little bit on that,” Mr Trump said.
“We think we’re going to bring it down to 10%.”
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The United States imported almost 4.6 million barrels of oil daily from Canada in October and 563,000 barrels from Mexico, according to the Energy Information Administration.
US daily production during that month averaged nearly 13.5 million barrels a day.
China responded aggressively to tariffs Mr Trump imposed on Chinese goods during his first term, targeting the president’s supporters in rural America with retaliatory taxes on US farm exports.
Both Canada and Mexico have said they have prepared the option of retaliatory tariffs to be used if necessary.
Canadian Prime Minister Justin Trudeau said on Friday: “We’re ready with a response, a purposeful, forceful but reasonable, immediate response.
“It’s not what we want, but if he moves forward, we will also act.”
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Tariffs to focus on Mexico and Canada
Read more:
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Mr Trudeau said tariffs would have “disastrous consequences” for the US, putting American jobs at risk and causing prices to rise.
Mexican President Claudia Sheinbaum said on Friday that Mexico has maintained a dialogue with Mr Trump’s team since before he returned to the White House.
But she emphasised that Mexico has a “plan A, plan B, plan C for what the United States government decides”.
“Now it is very important that the Mexican people know that we are always going to defend the dignity of our people, we are always going to defend the respect of our sovereignty and a dialogue between equals, as we have always said, without subordination,” she added.
Liu Pengyu, spokesman for the Chinese embassy in Washington, said the two countries should resolve their differences through dialogue and consultation.
“There is no winner in a trade war or tariff war, which serves the interests of neither side nor the world,” Mr Liu said in a statement.
“Despite the differences, our two countries share huge common interests and space for co-operation.”
Mr Trump also spoke about a plan for tariffs on the European Union without giving specific details.
He told reporters at the White House that he would “absolutely” put tariffs on the bloc, adding “the European Union has treated us so terribly”.
The cyber attack on Jaguar Land Rover (JLR), which halted production for nearly six weeks at its sites, cost the company roughly £200m, it has been revealed.
Latest accounts released on Friday showed “cyber-related costs” were £196m, which does not include the fall in sales.
Profits took a nose dive, falling from nearly £400m (£398m) a year ago to a loss of £485m in the three months to the end of September.
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Revenues dropped nearly 25% and the effects may continue as the manufacturing halt could slow sales in the final three months of the year, executives said.
The impact of the shutdown also hit factories across the car-making supply chain.
Slowing the UK economy
The production pause was a large contributor to a contraction in UK economic growth in September, official figures showed.
Had car output not fallen 28.6%, the UK economy would have grown by 0.1% during the month. Instead, it fell by 0.1%.
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How cyber attack ‘effectively hacked GDP’
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Reacting to JLR’s impact on the GDP contraction, its chief financial officer, Richard Molyneux, said it was “interesting to hear” and it “goes to reinforce” that JLR is really important in the UK economy.
The company, he said, is the “biggest exporter of goods in the entire country” and the effect on GDP “is a reflection of the success JLR has had in past years”.
Recovery
The company said operations were “pretty much back running as normal” and plants were “at or approaching capacity”.
Production of all luxury vehicles resumed.
Investigations are underway into the attack, with law enforcement in “many jurisdictions” involved, the company said.
When asked about the cause of the hack and the hackers, JLR said it was not in a position to answer questions due to the live investigation.
A run of attacks
The manufacturer was just one of a number of major companies to be seriously impacted by cyber criminals in recent months.
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Are we in a cyber attack ‘epidemic’?
High street retailer Marks and Spencer estimated the cost of its IT outage was roughly £136m. The sum only covers the cost of immediate incident systems response and recovery, as well as specialist legal and professional services support.
The Co-Op and Harrods also suffered service disruption caused by cyber attacks.
Four people were arrested by police investigating the incidents.
Sir Keir Starmer and Rachel Reeves have scrapped plans to break their manifesto pledge and raise income tax rates in a massive U-turn less than two weeks from the budget.
The decision, first reported in the Financial Times, comes after a bruising few days which has brought about a change of heart in Downing Street.
Read more: How No 10 plunged itself into crisis
I understand Downing Street has backed down amid fears about the backlash from disgruntled MPs and voters.
The Treasury and Number 10 declined to comment.
The decision is a massive about-turn. In a news conference last week, the chancellor appeared to pave the way for manifesto-breaking tax rises in the budget on 26 November.
She spoke of difficult choices and insisted she could neither increase borrowing nor cut spending in order to stabilise the economy, telling the public “everyone has to play their part”.
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‘Aren’t you making a mockery of voters?’
The decision to backtrack was communicated to the Office for Budget Responsibility on Wednesday in a submission of “major measures”, according to the Financial Times.
The chancellor will now have to fill an estimated £30bn black hole with a series of narrower tax-raising measures and is also expected to freeze income tax thresholds for another two years beyond 2028, which should raise about £8bn.
Tory shadow business secretary Andrew Griffith said: “We’ve had the longest ever run-up to a budget, damaging the economy with uncertainty, and yet – with just days to go – it is clear there is chaos in No 10 and No 11.”
How did we get here?
For weeks, the government has been working up options to break the manifesto pledge not to raise income tax, national insurance or VAT on working people.
I was told only this week the option being worked up was to do a combination of tax rises and action on the two-child benefit cap in order for the prime minister to be able to argue that in breaking his manifesto pledges, he is trying his hardest to protect the poorest in society and those “working people” he has spoken of so endlessly.
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Ed Conway on the chancellor’s options
But days ago, officials and ministers were working on a proposal to lift the basic rate of income tax – perhaps by 2p – and then simultaneously cut national insurance contributions for those on the basic rate of income tax (those who earn up to £50,000 a year).
That way the chancellor can raise several billion in tax from those with the “broadest shoulders” – higher-rate taxpayers and pensioners or landlords, while also trying to protect “working people” earning salaries under £50,000 a year.
The chancellor was also going to take action on the two-child benefit cap in response to growing demand from the party to take action on child poverty. It is unclear whether those plans will now be shelved given the U-turn on income tax.
A rough week for the PM
The change of plan comes after the prime minister found himself engulfed in a leadership crisis after his allies warned rivals that he would fight any attempted post-budget coup.
It triggered a briefing war between Wes Streeting and anonymous Starmer allies attacking the health secretary as the chief traitor.
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The prime minister has since apologised to Mr Streeting, who I am told does not want to press for sackings in No 10 in the wake of the briefings against him.
But the saga has further damaged Sir Keir and increased concerns among MPs about his suitability to lead Labour into the next general election.
Insiders clearly concluded that the ill mood in the party, coupled with the recent hits to the PM’s political capital, makes manifesto-breaking tax rises simply too risky right now.
But it also adds to a sense of chaos, given the chancellor publicly pitch-rolled tax rises in last week’s news conference.
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