A Looming Trade War

Out of the many tariffs that President Trump promised on the campaign trail, those he announced over the weekend are the most likely to affect U.S. consumers.

The three countries he targeted — Canada, China and Mexico — are America’s biggest trade partners, making up about four in 10 U.S. imports. The tariffs, up to 25 percent on Canada and Mexico and 10 percent on China, have shaken markets and angered allies. They will also likely raise prices on these countries’ goods, including gasoline, avocados and car parts. (See what prices could rise.)

Canada, China and Mexico have promised to retaliate. Leaders said that they didn’t want a trade war but that they felt forced to act. Canada announced 25 percent tariffs on U.S. products to match Trump’s. They target goods like American-made honey, tomatoes and whiskey. Mexico said it would impose retaliatory tariffs, too. China said that it would file a case against the United States at the World Trade Organization and take “corresponding countermeasures.”

Today’s newsletter will look at Trump’s goals for tariffs and what could come next.

Trump’s goals

Why has Trump imposed tariffs? He and his allies have offered three main explanations.

1. National security: Trump has argued the tariffs address national security concerns. China is a major geopolitical rival, and Trump says Canada and Mexico haven’t done enough to curb illegal immigration and drug trafficking.