Investing.com -- President Donald Trump has initiated a tariff war, imposing general levies of 25% on Canada and Mexico and 10% on China. The orders for these tariffs were signed on Saturday and will come into effect on Tuesday, according to White House officials.
The tariffs on energy imports from Canada will be less severe, with a 10% tariff rather than the full 25% levy. In a briefing on Friday, President Trump indicated that the U.S. will eventually place tariffs on "chips," with tariffs for oil and gas to be introduced "fairly soon." He specified the 18th of February as a key date.
Further tariffs are planned for steel, aluminum, and ultimately copper, building on the original tariffs on steel which, according to Trump, "saved the U.S. steel industry." The President emphasized the inevitability of these tariffs and stated that there is nothing the affected countries can do to prevent their implementation.
In addition to these measures, President Trump also hinted at significant tariff actions in Europe. He suggested the U.S. would be "doing something very substantial” regarding tariffs in Europe.
In his statements, President Trump reflected on the past strength of the U.S., attributing it to being a tariff country rather than an income-tax country. He questioned the effectiveness of the latter model, asking, "How did that work out?"
The announcement of these tariffs led to a sell-off in U.S. stocks on Friday. The Dow closed down 0.75%, the S&P 500 fell 0.5%, and the NASDAQ dropped 0.28%. Automakers such as General Motors Company (NYSE:GM), Ford Motor Company (NYSE:F), and Stellantis NV (NYSE:STLA), which have significant exposure to Mexico and Canada, could potentially face significant impacts from these tariffs.