Canada, Mexico retaliate after Trump imposes tariffs on imports
Washington/Ottawa/Mexico City: US President Donald Trump has imposed steep tariffs on imports from Canada, Mexico, and China, escalating trade tensions in the region. The move, which Trump had been threatening for months, was formalised through an executive order on Saturday.
In response, Canada's caretaker Prime Minister Justin Trudeau announced a 25% tariff on US imports. "Tariffs violate a free trade agreement that was negotiated a few years ago. These measures will have real consequences for the American people," Trudeau stated at a press conference. Canada will impose immediate tariffs on C$30 billion worth of US goods starting Tuesday, followed by further tariffs on C$125 billion worth of products in the next three weeks. Trudeau also indicated that Canada is considering non-tariff measures related to critical minerals, energy procurement, and other partnerships.
Trump's executive order places a 25% tariff on imports from Canada and Mexico, along with a 10% tariff on all imports from China. The order includes a mechanism to escalate tariffs further if other countries retaliate.
Mexico has also responded with countermeasures. Mexican President Claudia Sheinbaum emphasized that while Mexico prioritises collaboration, it will not tolerate subordination. "We must work together under the principles of shared responsibility, mutual trust, and respect for sovereignty, which is non-negotiable," she stated on social media platform X.
Sheinbaum also rejected Trump's allegations that the Mexican government has ties with criminal organisations, calling the claims "slander" and asserting that Mexico would not accept any form of US intervention in its territory.
With the US' two largest trade partners pushing back, Trump's tariff policy is likely to fuel economic tensions in the region.
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Rupee falls 20 paise to 95.43 against US dollar in early trade
Mumbai (PTI): The rupee depreciated 20 paise to 95.43 against US dollar in early trade on Tuesday as market sentiments remained fragile after renewed military exchanges between US and Iranian forces in the Gulf region.
Forex traders said investor anxiety due to instability in the Gulf is causing massive capital flight into safe-haven assets, with the US dollar acting as the primary beneficiary.
Moreover, Brent oil prices is hovering near USD 113 per barrel, maintaining pressure on oil-importing economies like India.
At the interbank foreign exchange market the rupee opened at 95.30 then lost ground to touch 95.43 against the US dollar, in initial trade, registering a fall of 20 paise over its previous close.
Rupee fell 39 paise to close at an all-time low of 95.23 against the US dollar on Monday.
"With oil boiling rupee on Monday fell to a closing low of 95.0875 and this morning the opening was still lower as it becomes more and more vulnerable when dollar index rises due to safe-haven buying and oil prices rise due to the continuous fighting in the Gulf Region," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
The higher oil prices will keep rupee sold off against the dollar as oil companies and FPIs intensify dollar buying, Bhansali added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.51, up 0.15 per cent.
Brent crude, the global oil benchmark, was trading lower by 1.07 per cent at USD 113.22 per barrel in futures trade.
"Market sentiments remained fragile after renewed military exchanges between US and Iranian forces when Iranian forces launched fresh attacks in the Gulf as both sides sought to assert control over the strategic waterway," Bhansali said.
On the domestic equity market front, Sensex declined 361.62 points to 76,907.78 in early trade, while the Nifty dropped 134.90 points to 23,980.60.
Foreign Institutional Investors purchased equities worth Rs 2,835.62 crore on Monday, according to exchange data.
