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  • Trade wars intensify as US tariffs on Canada, Mexico, China take effect

    Trade wars intensify as US tariffs on Canada, Mexico, China take effect

    Mounting trade wars between the United States and its largest economic partners deepened on Tuesday as US tariffs on Canada, Mexico and China kicked in, sparking swift retaliation from Beijing and Ottawa.

    Steep US tariffs on Canadian and Mexican goods came into effect as a deadline to avert President Donald Trump’s levies passed without the nations striking a deal, in a move set to snarl supply chains.

    Trump had unveiled — and then paused — blanket tariffs on imports from major trading partners Canada and Mexico in February, accusing them of failing to stop illegal immigration and drug trafficking.

    In pushing ahead with the duties, Trump cited a lack of progress in tackling the flow of drugs like fentanyl into the United States.

    The duties stand to impact over $918 billion worth of US imports from both countries.

    Trump also inked an order Monday to increase a previously imposed 10 percent tariff on China to 20 percent — piling atop existing levies on various Chinese goods.

    Beijing condemned the “unilateral imposition of tariffs by the US” and swiftly retaliated, saying it would impose 10 and 15 percent levies on a range of agricultural imports from the United States, from chicken to soybeans.

    Those tariffs will come into effect next week.

    Economists caution that tariffs could raise consumer prices while weighing on growth and employment.

    Asian markets fell on opening Tuesday, with Japan’s Nikkei index dropping more than two percent and Hong Kong’s Hang Seng down 1.5 percent after Trump’s latest tariff actions.

    The Tax Foundation estimates that before accounting for foreign retaliation, tariffs on Canada, Mexico and China this time would each cut US economic output by 0.1 percent.

    And sweeping duties, particularly on Canada and Mexico, are set to upset supply chains for key sectors like automobiles and construction materials, risking cost increases to households.

    This could complicate Trump’s efforts to fulfill his campaign promises of lowering prices for Americans.

    On Monday, Trump told reporters that Canada and Mexico should “build their car plants, frankly, and other things in the United States” in order to face no tariffs.

    Former US officials see Trump’s tariffs over drugs like fentanyl as a means to tackle socio-economic problems — while providing legal justifications to move quickly.

    Washington is also seeking leverage and to rebalance trade ties, analysts say.

    But using emergency economic powers to impose tariffs on Canada, Mexico and China is a novel move, and could trigger lawsuits.

    – ‘Existential threat’ –

    Canadian Prime Minister Justin Trudeau on Monday pledged to impose retaliatory 25 percent tariffs on Washington, saying in a statement: “Canada will not let this unjustified decision go unanswered.”

    Mexican President Claudia Sheinbaum said her country has contingency plans.

    If Trump continues with his tariff plans, KPMG chief economist Diane Swonk warned ahead of them going into effect: “We could easily reach the highest effective tariff rate since 1936 by the beginning of 2026.”

    Both consumers and manufacturers stand to bear the costs of additional tariffs, which could diminish demand and trigger layoffs as businesses try to keep costs under control, she told AFP.

    Robert Dietz, chief economist at the National Association of Home Builders, told AFP the group expects a possible “combined duty tariff rate of above 50 percent on Canadian lumber” as proposed duties add up.

    Even as the United States also plans to expand forestry, Dietz said, prices will likely rise in the short-run.

    Anecdotally, some builders expect they could face higher costs of $7,500 to $10,000 per newly built single family home, he said.

    – Industry pushback –

    Trump’s doubling down on tariffs has already drawn industry pushback.

    The US-China Business Council, a group of around 270 American firms that do business in China, warned in a statement that sweeping tariffs would hurt US firms, consumers and farmers “and undermine our global competitiveness.”

    “Any use of tariffs should be strategic and targeted, focusing on specific US national security goals and unfair Chinese economic practices,” the council’s president Sean Stein said.

    The National Retail Federation, meanwhile, warned that as long as tariffs on Canada and Mexico are in place, “Americans will be forced to pay higher prices on household goods.”

    While Washington has targeted China over chemicals for illicit fentanyl, many of the components have legitimate uses, too — making prosecution tricky.

    Trudeau has said that less than one percent of the fentanyl and undocumented migrants that enter the United States come through the Canadian border.

  • Trump Announces New Tariffs on Mexico, Canada & China Over Fentanyl Crisis

    Trump Announces New Tariffs on Mexico, Canada & China Over Fentanyl Crisis

    President Donald Trump announced Thursday that the U.S. will impose a 25% tariff on goods from Mexico and Canada, effective March 4th, alongside an additional 10% duty on Chinese imports. The move, justified by Trump as a response to the continued flow of deadly drugs, particularly fentanyl, into the United States, marks a significant escalation in trade tensions.

    Speaking to reporters in the Oval Office, Trump stated that the new tariffs on Chinese imports would be added to the 10% tariff already levied on February 4th in response to the fentanyl crisis, resulting in a cumulative 20% tariff. He initially announced the new duties on his Truth Social platform, emphasizing that drugs, “namely fentanyl,” were still entering the U.S. at “very high and unacceptable levels.”

    “I don’t see that at all. No, not on drugs,” Trump responded when asked if Mexico and Canada had made sufficient progress in curbing fentanyl shipments.

    A White House official confirmed that discussions are ongoing with China, Mexico, and Canada, noting that while progress has been made on migration issues, “there are still concerns on the other issue of fentanyl deaths.”

    Implications:

    The human cost of the fentanyl crisis is undeniable. According to the Centers for Disease Control, synthetic opioids, primarily fentanyl, were responsible for 72,776 deaths in the U.S. in 2023. The emotional impact on families and communities across the nation is profound, fueling a desperate search for solutions.

    Economic Impact: These tariffs could disrupt supply chains, raise prices for consumers, and potentially harm businesses in all three countries.
    Diplomatic Relations: The move could strain relations with key trading partners and complicate efforts to address other shared challenges.
    Effectiveness: It remains to be seen whether tariffs will effectively curb the flow of fentanyl, or if they will simply shift trafficking routes and create new challenges.

    Read Also: Oil Markets Roil as Trump’s Tariffs Trigger Supply Chain Fears

    Background

    This action mirrors Trump’s previous approach of escalating tariffs during trade disputes, as seen during his first term with China. However, Chinese President Xi Jinping has so far refrained from engaging in negotiations specifically over fentanyl, opting for limited retaliatory tariffs on U.S. energy and farm equipment.

    Mexico’s extradition of drug lord Rafael Caro Quintero, convicted in 1985 for the murder of a U.S. Drug Enforcement Administration agent, highlights the ongoing efforts to combat drug trafficking.

    Trump’s decision to impose new tariffs is a high-stakes gamble that could have far-reaching consequences. While the desire to address the fentanyl crisis is understandable, the effectiveness of tariffs as a solution is questionable. The potential for economic disruption and strained diplomatic relations must be carefully weighed against the potential benefits.

  • China opposes US moves to sabotage Belt, Road cooperation

    China opposes US moves to sabotage Belt, Road cooperation

    The Chinese government on Friday opposed the U.S. alleged sabotage of Belt and Road cooperation through the means of force.

    It also expressed regret over Panama’s decision not to renew the Memorandum of Understanding (MoU) on the Belt and Road Initiative (BRI).

    Chinese Foreign Ministry Spokesperson, Lin Jian, disclosed this at the regular virtual news conference by the ministry in Beijing, China.

    He spoke against the backdrop of recent announcement by Panama’s President José Mulino, reportedly saying he instructed a 90-day notice for withdrawal from Belt and Road cooperation agreement with China to be submitted to Beijing.

    Lin said, “China firmly opposes the U.S. smear and sabotage of Belt and Road cooperation through the means of pressuring and coercion, and deeply regrets Panama’s decision to not renew the MoU on the Belt and Road Initiative (BRI).

    “The BRI is an economic cooperation initiative with the participation of more than 150 countries, including over 20 Latin American and Caribbean countries, and its outcomes have benefited people of many countries, including Panama.

    “In recent years, China and Panama’s cooperation under the BRI has produced fruitful outcomes and continued to deliver tangibly for the two peoples.

    “We hope that Panama will bear in mind the overall bilateral relations and the long-term interests of the two peoples, steer clear of external interference and make the right decision.”

    He explained the Panama President’s decision to exit the Belt and Road agreement with Beijing before the U.S. Secretary of State Marco Rubio’s visit, saying China had made a response.

    According to him, since the establishment of diplomatic ties between China and Panama, the two countries have seen comprehensive and rapid growth of bilateral relations.

    He also said that both parties have achieved fruitful outcomes in the cooperation under the framework of the BRI, which delivered tangibly for the two peoples.

    Fielding questions on China’s commitment to achieve global regulation of Artificial Intelligence (AI), he disclosed that Vice Premier Zhang Guoqing would attend the AI Action Summit global governance scheduled to hold in France.

    Zhang, a Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, would travel to France at the invitation of the host country from Feb. 9 to 12 to attend the summit.

    “China is an active advocate and practitioner of AI global governance. In October 2023, President Xi Jinping put forward the Global Initiative for AI governance, which proposed China’s solution and contributed China’s wisdom on this profound topic of our times.

    “During Xi’s visit to France in May last year, China and France released a joint declaration on AI and global governance, which stated that China is willing to participate in the AI Action Summit to be held by France in 2025.

    “Zhang attending the Summit as Xi’s special representative is a step to implement the common understandings between the two presidents and demonstrate China’s responsible attitude as a major country in the field of AI and its commitment to advancing development and security of AI.

    “Through this Summit, China looks forward to enhancing communication and exchanges with all sides, pooling consensus for cooperation and actively advancing the implementation of the U.N. Global Digital Compact.

    “We also welcome countries around the world to participate in the 2025 World AI Conference in China, shape an AI global governance framework based on broad consensus and promote AI for good and for all,” he stated.

  • Trump slams tariffs on Canada, Mexico, China

    Trump slams tariffs on Canada, Mexico, China

    President Donald Trump announced broad tariffs Saturday on major US trading partners Canada, Mexico and China, claiming a “major threat” from illegal immigration and drugs — a move that sparked promises of retaliation.

    Canadian and Mexican exports to the United States will face a 25 percent tariff starting Tuesday, although energy resources from Canada will have a lower 10 percent levy.

    Goods from China, which already face various rates of duties, will see an additional 10 percent tariff.

    Trump’s orders also suspended exemptions allowing low-value imports from the three countries to enter the US duty-free.

    The announcement threatens upheaval across supply chains, from energy to automobiles to food.

    Trump invoked the International Emergency Economic Powers Act in imposing the tariffs, with the White House saying “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency.”

    The aim is to hold all three countries “accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country,” the White House added.

    China’s commerce ministry said in a statement it would take “corresponding countermeasures” and file a claim against Washington at the World Trade Organization.

    Mexican President Claudia Sheinbaum announced that her country would impose retaliatory tariffs.

    Sheinbaum said she had told her economy minister “to implement Plan B that we have been working on, which includes tariff and non-tariff measures in defense of Mexico’s interests.”

    Canadian Prime Minister Justin Trudeau — who spoke with Sheinbaum — separately said his country would hit back with 25 percent levies of its own on select American goods worth Can$155 billion (US$106.6 billion), with a first round on Tuesday followed by a second one in three weeks.

    “We’re certainly not looking to escalate. But we will stand up for Canada, for Canadians, for Canadian jobs,” he said, as he warned of a fracture in longstanding Canada-US ties.

    British Columbia Premier David Eby announced that his province would specifically retaliate against “red” US states led by members of Trump’s Republican Party.

    Trump has repeatedly expressed his approval of tariffs as a policy measure, and has signaled that Saturday’s action could be the first volley in further trade conflicts to come.

    This week, he also pledged to impose future duties on the European Union.

    He has also promised tariffs on semiconductors, steel, aluminum, oil and gas.

    “Tariffs are a powerful, proven source of leverage for protecting the national interest,” the White House said.

    – ‘Opening salvo’ –

    “The tariff action announced today makes clear that our friends, neighbors and Free Trade Agreement partners are in the line of fire,” said Wendy Cutler, vice president at the Asia Society Policy Institute and a former US trade negotiator.

    “The move today is an opening salvo on the tariff front,” she told AFP.

    Economic integration between the United States, Mexico and Canada — who share a trade pact — means stiff tariffs will have “a strong and immediate impact” in all three countries, she said.

    Imposing sweeping tariffs on the three biggest US trading partners in goods carries risks for Trump, who won November’s election partly due to public dissatisfaction over the economy.

    Higher import costs would likely “dampen consumer spending and business investment,” said EY chief economist Gregory Daco.

    He expects inflation would rise by 0.7 percentage points in the first quarter this year with the tariffs in place, before gradually easing.

    “Rising trade policy uncertainty will heighten financial market volatility and strain the private sector, despite the administration’s pro-business rhetoric,” he said.

    Economists also expect growth to take a hit.

    Trump’s supporters have downplayed fears that tariffs would fuel inflation, with some suggesting his planned tax cuts and deregulation measures could boost growth instead.

    – ‘Drive up costs’ –

    Doug Ford, premier of Canada’s economic engine Ontario, warned of potential job losses and a slowdown in business with tariffs.

    He told CNN Saturday: “We’re going to stand up for what’s right.”

    US Senate Minority Leader Chuck Schumer has warned new tariffs could “further drive up costs for American consumers.”

    Canada and Mexico are major suppliers of US agricultural products.

    The tariffs are also expected to hit the auto industry hard, since automakers and suppliers produce components throughout the region.

    Analysts have warned that hiking import taxes on crude oil from countries like Canada and Mexico threaten US energy prices too.

    Nearly 60 percent of US crude oil imports are from Canada, according to a Congressional Research Service report.

  • China, Nigeria, and Hostage Aircraft

    China, Nigeria, and Hostage Aircraft

    Every story has two sides, but when a country’s reputation as  a sovereign and an investment destination comes under threat, it calls for immediate concern and action from its citizens and leaders. The recent unfolding of a concerning development has significant implications for Nigeria’s global standing as an investment hub.

    A Chinese company, Zhongshan Fucheng Industrial Investment Co. Ltd, secured a court order in France following an arbitration award  initiated in 2017, with the Ogun State Government over a contractual relationship  that dates to 2010. The arbitration panel ruled in favour of Zhongshan, stating that “It is clear that Zhongshan is the effective winner in these arbitral proceedings, in that it has proved its version of events is accurate, successfully resisted Nigeria’s jurisdictional and preliminary objections, established a valid claim against Nigeria under the Treaty, and obtained an award for substantial damages.” This is not just a legal victory for the Chinese firm, but a red flag for Nigeria’s global investment reputation that demands immediate attention and action.

    This ruling is a significant blow to Nigeria’s absolute sovereign status and the doctrine of sovereign immunity. The order has since been upheld by a US court, which dismissed Nigeria’s sovereign immunity defence in enforcing the $70 million investment treaty award. The US court was scathing in its judgment, asserting that Nigeria had “gruesomely” violated the Chinese firm’s fundamental and commercial rights. This ruling has led to the dramatic seizure of three Nigerian aircraft in France—aircraft that belong to the federal government. The seized jets include a Dassault Falcon 7X, a Boeing 737-7N6/BBJ, and an Airbus A330-243, all stationed at Paris-Le Bourget and Basel-Mulhouse airports.

    While initially a dispute between a subnational government and a private firm, this situation has spiralled into a crisis with broader and more severe implications for Nigeria. It raises critical questions about Nigerian subnational entities’ conduct and  the federal government oversight of international contracts.  Can subnational entities enter into agreements guaranteed by sovereign that do not include national assets or support? What level of due diligence should subnational governments observe before they engage in contractual relationship with foreign firms? More importantly, does this case reflect a more profound, systemic issue within Nigeria—a culture that lacks respect for contracts and international agreements?
    The case also casts a spotlight on the perceived weaknesses of Nigeria’s institutions, which need more authority or respect on the global stage.+

    This perception is troubling and raises the question: do foreign investors lack confidence in Nigerian  institutions ? These are not rhetorical questions but rather pressing concerns that demand a thorough investigation and straightforward answers. The implications are dire, as evidenced by this case, which has resulted in public embarrassment for the country and the potential loss of much-needed funds due to poorly negotiated and managed contractual relationship . A thorough investigation is crucial to restore trust and confidence in Nigeria’s international business dealings.

    This situation is not an isolated incident but part of a worrying trend. It calls to mind earlier cases, such as the P&ID arbitration ruling in 2010, where Nigeria was found tardy in a failed gas supply and processing contract. Though this was reversed but it left a scar .  Similarly, in  2019, a UK court awarded an Irish engineering firm $9.6 billion in damages against Nigeria over a failed gas project. In that case, the firm went so far as to instruct its lawyers to identify Nigerian assets worldwide that could be seized to enforce the arbitration award. These incidents paint a troubling picture of Nigeria’s handling of international contracts and the country’s reputation on the global stage.

    The ongoing dispute with Zhongshan Fucheng Industrial Investment Co. Ltd is likely to negatively impact Nigeria’s global standing, especially when the country is desperately trying to attract foreign direct investment. This case highlights the often poorly structured nature of Nigeria’s international contracts, where subnational governments and even private companies have found ways to entangle the federal government in their questionable and often poorly thought-out deals. The result is a further tarnishing of Nigeria’s already fragile reputation. Following the Dangote saga where there is perception that Nigeria could not treat its own businesses fairly ,this is another blow to Nigeria’s global image . The country already suffers from a prevalent negative perception regarding the sanctity of contracts, largely due to inconsistent adherence to contractual obligations. The federal government’s failures to uphold these commitments, particularly at the subnational level, only exacerbate the problem. This disregard for the sanctity of contracts contributes to a growing cynicism about Nigeria as a reliable destination for investment and business. It is crucial to uphold agreements and respect contracts to restore Nigeria’s reputation.

    The symbolism of this saga is still visible to us. Beyond the immediate damage to Nigeria’s national reputation, this incident brings broader issues related to leadership, business ethics, and the sacrosanct nature of contracts. It underscores the importance of continuity in government—where all governments inherit their predecessors’ assets and liabilities and should not cancel contracts arbitrarily. Moreover, this situation highlights the critical need to build solid, responsive, and trustworthy institutions that command respect locally and internationally and can handle the complexities of international business contracts. It is an anomaly that contracts involving Nigerian subnationals or firms and foreign businesses always situate arbitration in foreign lands when local institutions are available and ostensibly capable of fulfilling this role.

    This incident lays bare Nigeria’s leadership challenges and sensitivity to foreign investment disputes. If not resolved diplomatically and swiftly, such disputes could severely jeopardize Nigeria’s diplomatic relations and economic credibility.  I am happy the minister of foreign affairs is rising up to the challenge. The needless dispute between a negligent subnational entity and a private firm, which has dragged sovereign assets into the fray, could strain diplomatic ties between Nigeria and China. Recall that the root of this matter is the bilateral investment treaty signed by Nigeria and China in 2001 and since then we have seen progress in trade and investments on both sides. This recent imbroglio is  particularly concerning at a time when the federal government is expending billions of naira to woo foreign investors. The dispute has cast a stark light on the nature of business transactions in Nigeria, revealing the many dangers they pose to investors, especially when projects collapse or are mismanaged. The potential loss of much-needed funds due to poorly negotiated and managed  contractual relationship   is a stark reminder of the economic impact of such disputes.

    The recurring cases of Chinese companies taking advantage of Nigeria’s open business doors are increasingly worrisome. It is imperative that the federal government, particularly the Office of the Attorney General, take a closer look at international contracts entered by state governments to insulate sovereign assets from exposure. This situation raises significant constitutional questions: does the federal government have the constitutional authority to regulate or even approve contracts entered by subnational entities?
    The ongoing dispute between Zhongshan Fucheng Industrial Investment Co. Ltd and the Ogun State Government, which has now implicated Nigeria’s sovereign assets, is a stark reminder of the importance of upholding the sanctity of contracts and ensuring due diligence in international agreements. The federal government must take decisive action to safeguard Nigeria’s reputation as a reliable investment destination. This includes strengthening institutions, enforcing contractual commitments, and resolving disputes through diplomatic channels. Please government must  address these issues to ensure  good diplomatic relations and  not deter much-needed foreign investment, compromising Nigeria’s economic future.
    The time has come for Nigeria to reassess its approach to international business dealings. This reassessment must focus on restoring confidence among global investors, ensuring that all levels of government adhere to international best practices, and building institutions that are strong, respected, and trusted by domestic and international stakeholders. Nigeria can repair its reputation and safeguard its national interests in an increasingly interconnected global economy by doing so.

    This incident is more than just a legal or diplomatic issue; it is a wake-up call for Nigeria to realign its policies, practices, and institutions with global business demands. The country cannot afford to continue this path of negligence, laxity  and mismanagement. As this case has shown, the cost is far too high—not just in monetary terms, but in terms of Nigeria’s global standing, credibility, and future prosperity. It is imperative that Nigeria learn from this episode, take corrective action, and ensure that such incidents are not repeated in the future. The nation’s economic future and place in the global community depend on it. As for the foreign business sharks that aim to reap off Nigeria’s through dubious business deals  that cannot hold waters, it is time we isolate and deal with them and their Nigerian companions. Convicting some of these criminals will serve as a deterrent to others and help reduce such incidents in Nigeria.